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The renewed surge of A-share semiconductors should not be bought based on industrial logic alone; caution is needed as this may constitute a crowded trade.

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When the A-share semiconductor and AI hardware chains surge rapidly, two extreme reactions tend to emerge: one type of person feels that missing out on gains (FOMO) is more painful than actually incurring losses, while another believes that excessive rises necessarily signal a bubble.

Both of these are too fast. In areas like semiconductors, computing power, optical modules, and storage, the industrial logic might be true. AI training and inference will indeed boost hardware demand, and domestic substitution has certainly provided narrative space and order opportunities for local companies. The problem is that just because the industrial logic holds true does not mean that the probability of investing in it now is good.

Similar market trends have occurred repeatedly in history: the liquor sector (Baijiu), new energy, pharmaceuticals, core asset grouping, and TMT. Each time, there was real logic behind it. When these sectors decline, it doesn’t necessarily mean the logic has disappeared; rather, the timing/rhythm between valuation, positioning, earnings realization, and liquidity was off.

Let’s first see how much it has risen in this round

Let’s first clarify the focus. The strongest “AI-related companies” on A-shares right now are not the general media concepts from 2023, but rather three more solid value chains:

  • Semiconductor manufacturing and equipment agency.
  • Independent CPU / GPU / AI chips.
  • Optical modules, optical components, and compute infrastructure.

The gains in the table below are uniformly calculated using Yahoo Finance’s fully adjusted daily data, as of the close on 2026-05-25.

Proxy or Company Code Period Period Gain (%)
半导体 ETF 代理 159995.SZ 2026-04-07 到 2026-05-25 66.1%
AI ETF 代理 515070.SS 2026-04-07 到 2026-05-25 40.5%
中芯国际 688981.SS 2026-04-07 到 2026-05-25 63.1%
海光信息 688041.SS 2026-04-07 到 2026-05-25 51.5%
寒武纪 688256.SS 2026-04-07 到 2026-05-25 87.5%
中际旭创 300308.SZ 2026-04-07 到 2026-05-25 76.6%
新易盛 300502.SZ 2026-04-07 到 2026-05-25 43.7%

If we only look at the slope over a little more than a month, this is no longer a “slow bull recovery,” but rather a highly typical primary rally driven by the resonance between sentiment and fundamentals. The question isn’t whether its gains are justified, but how much of that narrative has already been priced into the stock.

It’s Not Just AI: Many Concepts of “True Logic” Have Gone Through Their Failures

To summarize: Market cycles like this have happened before, and they are not limited only to tech sectors such as AI, semiconductors, or TMT. The more common scenario is that the underlying logic remains, the cyclical peak hasn’t immediately ended, but the steepest part of the price action has already priced in (or absorbed) the optimistic expectations for the next few quarters, or even years.

  • The logic behind Baijiu was not fake; the leading brands’ cash flows and brand moats were genuine. However, buying consumption certainty at valuations of 50x or 60x meant that repayment was still required later on.
  • New energy is no exception to this rule either. Although the penetration rate continues to rise, when supply expands, price wars erupt, and profits decline all at once, stock prices will not wait for the long-term narrative to slowly materialize.
  • Pharmaceuticals and medical services are even more typical. Many companies’ underlying businesses remain strong

So, today’s semiconductor and AI hardware chains certainly have genuine substance. However, the cluster of baijiu, new energy, medicine, and blue chips also once had real potential. The subsequent chaos wasn’t because all the initial narratives were fraudulent schemes, but rather because prices turned “the future will be good” into “the future must be perfect.”

With this batch of companies now, are their earnings supporting the stock price?

What truly needs to be looked at is not “whether semiconductors have a future,” but whether “the growth rate of profits can keep up with the slope of the stock price from the last six or seven weeks.” I will break down several representative companies:

Company Industry Chain 2025 Revenue / YoY 2025 Net Profit Attributable to Parent / YoY 2026 Q1 Revenue / YoY 2026 Q1 Net Profit Attributable to Parent / YoY Stock Price Increase from 2026-04-07 to 2026-05-25 My Key Focus Area
SMIC (Semiconductor Manufacturing International Corp) Wafer Fabrication 67.323 billion yuan, +16.49% 5.041 billion yuan, +36.29% 17.617 billion yuan, +8.1% 1.361 billion yuan, +0.4% 63.1% The stock price slope is significantly faster than the quarterly profit growth rate,

This table contains two important signals.

First, not all major rallies are driven by short covering plays. This is especially true for companies like Zhongji Xuchuang, Xin Yisheng, and Cambricon; this current cycle is not purely thematic momentum—profits and orders are genuinely being realized. Because of this, many people naturally become complacent about potential pullbacks, thinking that “if there are solid earnings, a deep correction won’t happen.”

Second, earnings realization does not guarantee a safe buy-in point. SMIC and Seagull Information have clearly demonstrated this point: although their industry logic is completely robust, their short-term stock price momentum has significantly outpaced the latest quarterly profit growth rate. The market doesn’t just look at this current report; it looks at whether you can maximize (or deliver) the market share, ASP, capital expenditure, and domestic substitution potential for the coming years.

This is also why, even when experiencing a “true boom” (真景气), some people can profit from the trend, while others get washed out during pullbacks/drawdowns. What was wrong was not the direction, but the timing.

Increasing Semiconductor Positions Now: The issue isn’t whether it is right or wrong, but the timing (position).

If I had to summarize it in a single sentence, my judgment is:

Adding to semiconductor positions now isn’t necessarily that the direction is wrong; rather, the risk-reward ratio is no longer as favorable as it was in early April. This is especially true for new capital—it looks more like chasing momentum from high levels rather than low-risk positioning.

I will divide the current semiconductor and AI hardware chain into three categories:

Group Representative Company Current Strongest Support Current Biggest Risk
With existing earnings and potential for continued volume growth InnoLight, Skyetech (or names) Overseas AI compute capital expenditure, 800G / 1.6T ramp-up, profit realization Expectations are too high; even if financial reports continue to grow, they might pull back because marginal gains are no longer exceeding expectations.
Strong industry direction, but profit growth lags stock price movement SMIC, Hygon Information (or names) Domestic substitution, independent computing power, industrial security Valuation runs first; it is easier to enter a sideways or consolidation period later.
Most aggressive earnings, but highest volatility Cambricon (or names) Simultaneous explosion of orders and profit, maximum elasticity Once the market shifts from “looking at growth rate” to “looking at sustainability,” pullbacks are often the strongest.

So, if you’re asking about semiconductors, the chances are they should be fine/viable.

If you are asking whether adding positions at a spot like “2026-05-25” means catching a high price, then the answer should not be based on industry trends; rather, it should address position sizing and drawdowns:

  • For those who already have positions at low levels, the main question isn’t whether to chase or not, but whether to reduce the position exposure/scale back the size of their holdings.
  • For those with no positions at high levels who want to chase, what they are buying is mainly sentiment and expectations that emerged over the past six or seven weeks.
  • For those who genuinely want to get into the market, a more reasonable prerequisite is usually not a single large bullish candle, but rather a period of proper consolidation, or having the next earnings report push expectations further ahead.

Historically, what most resembles the present isn’t just a period like 2021 semiconductors or 2023 AI/CPO. The clustering of alcoholic beverages (Baijiu), new energy, pharmaceuticals, and stable blue chips are all reminding us of the same thing: the market is often most dangerous not when the underlying logic is weakest, but when the logic is smoothest and everyone can easily understand it.

I don’t think this current cycle in semiconductors is over, nor do I think it’s just a pure bubble. But if you translate “the industry fundamentals are sound” directly into “it’s fine to jump in today,” you are very likely to repeat the old pattern: the logic is real, and so are the drawdowns. What makes people miserable in the end isn’t realizing they picked the wrong direction; it’s looking back years later and finding out that what they bought wasn’t the industry trend, but rather the most expensive tail end of that consensus.

References

Artificial Intelligence

Original Prompt 

$blog-writer Did modules related to recent A-share surges, such as semiconductors and AI companies, experience similar trends before? When did this happen, what sectors were involved, what were the related stocks, how long did it last, and how did it collapse? Is increasing semiconductor holdings reasonable now, or is this buying at peak prices? Analyze the data of the related companies. All the data should be organized and compiled into tables for easy reading.

This piece establishes its core narrative, material density, and structure based on the original prompt provided above, following the initial drafting approach. The date field retains the original publication time, and all other content is dedicated solely to serving the scope of the current article.

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