In May 2026, global markets continued to revolve around the AI theme, but the structure of the rally shifted from broad-based upside toward elevated dispersion and earnings validation. Technology remained the strongest area, yet internal rotation accelerated significantly, making the market harder to navigate. In our view, this does not signal the end of the trend. Rather, it reflects a transition from theme-driven pricing toward a more fundamental focus, with capital paying closer attention to earnings quality, value-chain positioning, and long-term competitive barriers.
In overseas markets, AI-related demand continued to support semiconductors, servers, advanced packaging, optical communications, and related infrastructure. At the same time, parts of software and enterprise services began to show commercially meaningful benefits from AI adoption, suggesting that opportunities are broadening beyond hardware into a wider set of application and service layers. In China, the technology theme remains intact, but higher positioning, increased regulatory attention, and greater concentration of capital have amplified volatility in some crowded segments.
We believe the central question for the AI industry will gradually shift from who has the strongest model to who can turn model capability into high-frequency applications and commercial revenue. As differences in raw model strength narrow and computing costs continue to decline, companies that can persist through cycles will need strong application ecosystems, sticky customer relationships, closed-loop data advantages, and real monetization capability. AI applications and platform ecosystems therefore remain areas worth tracking closely.
In healthcare, a visible divergence has emerged between industry fundamentals and share-price performance. Chinese innovative drug companies continue to make progress in international conferences, clinical data, and global partnerships, yet the sector has faced short-term pressure from style rotation, limited liquidity, and market sentiment. In our view, short-term prices are driven by capital flows and emotion, while long-term market value ultimately converges with intrinsic business value. Looking ahead, while AI hardware may remain in focus in the near term, AI applications and innovative healthcare still offer meaningful medium- to long-term allocation value from today's lower valuation base and continuing fundamental progress.
Risk disclosure: Market fluctuations may cause investment outcomes to vary. Investors should make rational decisions based on their own risk tolerance. This article is for general information only and does not constitute investment advice, an offer, or a solicitation. Past performance is not indicative of future results.