Can the AI theme not change the long-term trend? SPDB AXA Investment Plan Grasps the "Second Half of Artificial Intelligence"

A few days ago, the 2023 World Robot Conference, which has attracted much attention from the industry, opened in Beijing. One of the highlights of this conference is the development of artificial intelligence (AI) technology, which provides more possibilities and creativity for the development and evolution of robots.

The development of AI technology has become an important driving force to guide industrial change, and it is also a highlight of the capital market this year. Looking back at the market performance since the beginning of the year, it can be described as ups and downs. If we say that at the beginning of the year, people are more focused on the post-epidemic economic recovery, especially in the expectation that consumption, real estate and other industries can recover. But with the birth of ChatGPT, it unexpectedly led a wave of hot AI sector market.

Taking the game industry as an example, according to data from China Securities Index Company, as of June 31, the CSI Animation and Game Index (930901) rose 92.7% during the year, and even the CSI Shanghai-Hong Kong-Shenzhen Game and Culture Media Index (931580), which contains more Hong Kong stock targets, achieved an increase of 24.6% during the same period. Overseas, also benefiting from the AI market, the Nasdaq index also rose 37.07% during the year. [footnoteRef:1] [1: Source: Wind, 2023/1/1-2023/7/31]

It can be said that the AI sector is one of the few investment areas this year that has outstanding performance in many markets at home and abroad. But market volatility will never be absent, entering the second half of the year, first the domestic AI sector has seen a correction, and the recent performance of the Nasdaq has also begun to cause investors to worry. How the AI sector, which performed well in the first half of the year, will evolve has become the focus of investors' attention.

AI technology leads industrial innovation, and the long-term investment potential is still huge

Around the future market performance of the AI sector, the current market is still relatively optimistic. Yu Jin, deputy director of the international business department of SPDB AXA Fund and fund manager of SPDB AXA Global Intelligent Technology (QDII), believes that the current volatility of the AI sector is a short-term consolidation, and its long-term performance is still relatively optimistic.

The optimism in the field of AI investment first comes from the huge shock brought to the technology industry and the investment community by various large models represented by ChatGPT, and its capabilities have completely surpassed the traditional recognition AI (small model) in previous years, and are generally believed to have the potential to change the production methods of multiple industries. Taking the game industry as an example, CICC's recent research report believes that AI technology will provide efficient automated production tools at the production end, promote industry production automation, standardization and scale, and enable the game industry to industrialize and break through the bottleneck of production capacity. On the experience side, it expands the possibilities of more diversity, personality and immersion of the game. [footnoteRef:2] [2: CICC: The Internet of Media: How Does AI Affect the Gaming Industry? ——Innovation in Change", 2023/6/28]

According to Luo Wen, fund manager of SPDB AXA, CSI Shanghai-Hong Kong-Shenzhen Game and Culture Media ETF, the development of AI technology may not only be a feast for leading game companies, but a common development opportunity for most companies in the industry: "Judging from recent performance, large companies and small and medium-sized companies have their own advantages. Large companies can combine the latest technology with the company's massive data to create a huge language model or structural framework. Newly built models or frameworks can better solve problems for customers and quickly monetize profits. Small and medium-sized companies can build an effective specialized model in their own subdivision vertical track. At the same time, AIGC can help small and medium-sized companies find the right customer group and find their own unique monetization direction in the segment. ”

At the same time, the development of AI technology will have a great pulling effect on the upstream and downstream of the industrial chain, especially with the increasing popularity of AI applications, the demand for high-performance computing power chips is also growing, especially GPU, currently A100, H100 and other large computing power chips are used for model training and reasoning. Further down, the industrial chain involved in AI servers is more diverse, including PCB motherboards loaded with chips, power management modules that power chips, optical modules for high-speed data transmission, and AI server foundry and other industries will benefit significantly.

Source: Prismark, CICC Research Department: "Big Model Drives Big Computing Power, Communication Transmission Upgrades - Top of the AI Wave Series", 2023/7/19

The differentiated development of Chinese and foreign industries and the importance of simultaneous investment in domestic and foreign markets are prominent

While AI brings great technological progress and industrial transformation opportunities, its differentiated investment opportunities in different markets and industries are also considered to be important opportunities for diversification of investment layout.

Yu Jin believes that due to the comprehensive advantages of software and hardware in the field of AI technology, there are relatively many companies in the US stock market that can directly benefit from the AI field. "[U.S. companies] have products that can directly raise prices and improve profits, whether in terms of software or hardware, there are relatively well-mapped targets." For China, the market dividend will eventually fall on a small number of companies with relatively certain future profits, such as companies in the media, game and other industries. ”

However, a series of recent policies in the United States are changing market expectations. Based on the demand for China's science and technology war, the United States has successively banned the sale of high-end AI chips to the mainland, and at the same time banned US capital from investing in China's semiconductors and microelectronics, quantum computing and artificial intelligence. The US policy has adversely affected the development of China's AI industry to a certain extent, but it has also brought development opportunities to some hardware manufacturers. Based on the demand for "domestic substitution", domestic hardware manufacturers are expected to be paid more attention.

However, due to the hardware field, especially the field of AI chips, there are many restrictions in China, and the world's advanced level is quite different, and it is expected that in the short term, it will still be based on "following the strategy" to prevent the large technological gap overseas. Yu Jin said: "It is precisely because of this gap that we have the necessity of deploying the Sino-US market at the same time. On the one hand, overseas and especially American technology companies are the first to benefit from the advancement of AI technology, and our investment in US stocks will share the dividends of their growth. Once domestic companies form a partial breakthrough, they may take advantage of the demand of the Chinese market to develop, which is also an important investment opportunity. ”

SPDB AXA has been working hard for a long time to provide global investment layout solutions

This year, the layout of the AI field has become one of the important factors for many investment institutions to achieve relatively good performance in volatile markets. SPDB AXA Fund has grasped the market wave led by AI technology based on years of cultivation in TMT, semiconductor, information technology and game media.

At present, SPDB AXA's investment tools in the field of AI include SPDB AXA Global Intelligent Technology (QDII) jointly managed by Yu Jin and Shi Ping, SPDB AXA CSI Shanghai-Hong Kong-Shenzhen Game and Culture Media ETF managed by Luo Wen, and SPDB AXA Technology Innovation Preferred Hybrid managed by Qin Wen, forming a multi-level and global AI investment solution covering active to passive, from on-site to off-market, from domestic to overseas, from software application layer to hardware.

Yu Jin said that although he is optimistic about the long-term development trend of the AI field, he still needs to pay attention to the risk of market adjustment in the short term. "Fundamentally, we must not only seize the opportunity of a market rise, but always insist on selecting companies that can form technological breakthroughs and leads, so as to gain an advantageous position in the market competition and hold them for a long time. Only in this way can we always 'keep up' in the wave of high-tech industries that are constantly innovating. ”

Luo Wen also expressed a similar view, she believes that the current market has accumulated certain adjustment risks after the previous period of rise, but the CSI Shanghai-Hong Kong-Shenzhen Game and Culture Media Index (931580) is more resilient in the process of pullback due to the inclusion of more Hong Kong stock targets, and the opportunities are more worthy of attention. "In the long run, the game media industry is also stabilizing and improving, and most of the sub-sectors are in the process of stepwise recovery."

SPDB AXA's AI investment solution focuses on mining securities with long-term growth dividends in the new era of scientific and technological revolution from the perspective of long-term investment and value investment, and has become an important tool for investors to build a global multi-level investment layout.

This article is derived from financial world information