China International Capital Corporation: The four rounds of adjustments in the tech bubble are remarkably similar. As long as the industry trends remain unchanged, the market digesting high valuations and high congestion is not a bad thing.

Starting from mid to late June, a notable correction has occurred in the global AI sector, with South Korea experiencing the most severe impact due to its "high leverage, high crowding, and high retail participation." This situation is fueled by the amplification effects of high crowding and high leverage, macroeconomic disturbances, and renewed concerns over potential bubble formations as the AI market reaches this point. In fact, before the dot-com bubble burst in March 2000, there had already been at least four significant and prolonged rounds of corrections in the tech sector. The triggers for the decline are highly reminiscent of the current adjustments: short-term fluctuations in industry trends, "headwinds" from the macro environment, and overheated valuation sentiments. Ultimately, the rebound of tech stocks arises from the alleviation of these three pressures. Therefore, for the current market to stabilize or even embark on a new rising trend, a similar combination is necessary. As long as the industry trends remain unchanged, digesting high valuations and high crowding is not a bad thing; in fact, a correction may increase the odds for future gains. The alleviation of tightening pressure from the Federal Reserve or a clear resolution could also help improve the market environment. However, the most crucial factor is still industrial catalysts; otherwise, the market may stabilize but struggle to initiate another significant rally. Before that happens, it is advisable to focus on short-term certainties and "bottleneck assets," such as the energy shortage in the U.S. and the semiconductor shortage in China. If there are concerns that hardware catalysts may be realized too slowly or to a limited extent, one could consider a gradual shift towards areas with less fundamental resistance, such as the internet and innovative pharmaceuticals, while cyclical and externally reliant sectors wait for a decline in U.S. Treasury yields.