On Friday (August 7th), the ChiNext AI index continued its rebound and recovery. AI application concept stock Chinese Online led gains with an increase of nearly 7%, while memory leaders Jiangbolong and Beijing Junzheng both rose over 5%. Leading optical module/CPO stocks saw significant intraday gains, with TFC Optical Communication closing up over 2%. However, Zhongji Innolight experienced a sudden downturn late in the session, closing down nearly 4%, with a daily fluctuation exceeding 10%.
Regarding popular ETFs, the ChiNext Artificial Intelligence ETF Huabao (159363), heavily weighted in leading optical module stocks, surged intraday by nearly 3%. It was briefly dragged into negative territory by the late-session plunge of the leading stock but quickly rebounded, ultimately closing up nearly 1%, successfully achieving five consecutive days of gains.
The afternoon downturn of Zhongji Innolight may be related to a piece of news. It is reported that U.S. optical module manufacturer AAOI (Applied Optoelectronics) revealed plans for large-scale capacity expansion in its financial report and conference call, sparking market concerns about industry competition.
During AAOI's conference call, it was indicated that the goal for this year is to increase monthly production capacity by threefold, requiring more automated equipment for expansion. AAOI plans to achieve a monthly output of 650,000 units of 800G/1.6T products by year-end, with a tenfold increase in capacity next year. This has raised concerns about its long-term potential to capture market share from domestic manufacturers. Although some analysis suggests its short-term impact is limited and it relies on technology from leading domestic companies, this negative rumor still triggered the stock price decline.
Focusing on the overall optical module sector, three key logics support mid-to-long-term prosperity:
1. Upward revisions in capital expenditures confirm industry prosperity; high growth in cloud revenue validates commercial implementation. CITIC Securities believes that against the backdrop of cloud companies' performance continuously confirming AI's driving role in business growth, AI cluster scale will further expand. As a crucial part of cluster networks, optical interconnection will sustain high-speed growth driven by three factors: increased GPU allocation ratio, port speed upgrades, and "optical replacing copper." They are optimistic about the mid-to-long-term prosperity of the optical communication sector.*
2. Continued emphasis on optical interconnection; CPO mass production accelerates cluster restructuring. A Kaiyuan Securities research report notes that NVIDIA's Rubin Ultra shifts focus towards large-scale interconnection at the NVL576 level, with the system configuration being the interconnection of eight 72-GPU racks using NPO for cross-rack connectivity. Meanwhile, CPO has entered mass production and will be heavily integrated into global AI factories in the second half of the year, expected to accelerate the penetration of optical interconnection technology and drive a structural revaluation of optical communication's value.*
3. Sufficient adjustments and undervalued valuations; clearing of positions lays a solid foundation for recovery. Guosheng Securities believes the previously overly crowded trading structure in the optical module sector is improving, with short-term risks largely released. Sufficient turnover and rebalancing of positions in the bottoming phase still require time. Subsequently, we need to wait for the gradual accumulation of favorable factors and the progressive restoration of market confidence.*
Within the main theme of AI trading, besides compute power positioning sectors like optical modules, AI applications are also a key focus. Referring to the U.S. SaaS benchmark, Palantir's quarterly report exceeded expectations, leading to a significant rally, indicating the market places a high premium on the ability to implement AI applications. The ChiNext Artificial Intelligence Index gathers many "software + hardware" combination stocks (e.g., vertical industry applications). Compared to pure hardware communications, these stocks benefit more from the dual logic of performance realization at the application layer and the reshaping of valuation systems.
The ChiNext Artificial Intelligence ETF Huabao (159363) and its off-exchange feeder funds (Class A: 023407, Class C: 023408) primarily focus on leading optical module/CPO players while also covering AI applications. The underlying index holds approximately 40% in "Zhongji Innolight + Eoptolink + TFC Optical Communication," making it a core standard-bearer for AI compute power. Furthermore, the latest AUM of the ChiNext Artificial Intelligence ETF Huabao (159363) exceeds 7.4 billion RMB, with an average daily turnover over the past six months exceeding 1 billion RMB, leading the eight ETFs tracking the same underlying index in terms of size and liquidity.
Data source: SSE, SZSE, etc.
*Reference sources for institutional views: CITIC Securities 'AI Investment Return Loop Appears, Firmly Optimistic About Optical Communication Sector'; Kaiyuan Securities 'Time for Optical Communication Configuration Has Arrived'; Guosheng Securities 'Optics: Panic Release, Adversity Leads to Good Fortune'
Explanation of related ETF fund fees: When subscribing for or redeeming fund shares, subscription/redemption agents may charge a commission not exceeding 0.5%. Fees for on-exchange trading are subject to the actual charges by securities companies; no sales service fee is charged.
Explanation of related feeder fund fees: Class C of the ChiNext Artificial Intelligence ETF Feeder Fund charges no subscription fee; redemption fee is 1.5% for holdings less than 7 days, and 0% for holdings 7 days (inclusive) or more; sales service fee is 0.3%. For Class A of the ChiNext Artificial Intelligence ETF Feeder Fund, subscription fee is 1% for amounts below 1 million RMB, 0.6% for 1 million (inclusive) to 2 million RMB, and 1000 RMB per transaction for 2 million RMB (inclusive) or more; redemption fee is 1.5% for holdings less than 7 days, and 0% for holdings 7 days (inclusive) or more; no sales service fee is charged.
