Technology remains the long-term trend, and the overcrowding in short-term trades needs to be fully digested.

On June 2nd, the three major A-share stock indices all rose, and the technology sector saw a phase of recovery. Previously, the technology-related sectors had accumulated significant gains, but were affected by profit-taking and crowded trading, leading to a rapid decline in the Sci-Tech 50 and the CSI TMT Industry Theme Index. Popular sectors such as computing power and semiconductors also saw significant declines, with the correction spreading from the core tracks to the entire industry chain. Analysts believe that this round of decline is only a digestion of the temporary market, not a reversal of the trend of technology growth, as the sector is undergoing structural adjustments. Funds are gradually withdrawing from targets with high valuations and moving towards high-odds subfields such as energy storage and robotics. Several securities firms have updated their monthly allocation strategies, focusing on investing in technology sub-assets with industrial catalysts and clear profit expectations.