AI Tech Stocks Lead A-Share Rally as STAR 50 Index Surges Over 25% in a Single Month

Tech Bull Market Arrives: ChiNext Hits 10-Year High

On April 30, the A-share market delivered an impressive monthly scorecard for investors. Major indices posted collective gains for the month, with the market exhibiting an overall trend of climbing amid volatility. The ChiNext Index rose more than 15%, successfully breaking through its June 3, 2015 high to set a 10-year record, while the ChiNext Composite Index reached an all-time high. The STAR 50 Index led the entire market with a staggering gain of over 25%, and the Shanghai Composite Index firmly held above the 4,100-point mark.

The core driving force behind this rally has been the technology sector, led by artificial intelligence. From large language models to AI chips, from autonomous driving to embodied intelligence, virtually the entire AI supply chain has blossomed, becoming the primary "battleground" for market capital.

AI Supply Chain Becomes a Hotbed of Daily Limit-Up Stocks

Looking back at April's market action, stocks hitting daily price limits were heavily concentrated in AI-related sectors. Segments including large language models, computing infrastructure, AI applications, and robotics took turns in the spotlight, with multiple stocks posting consecutive limit-up sessions.

From a fundamental perspective, this rally is not without foundation. Domestic large language model technology continues to iterate, with homegrown models like DeepSeek drawing global attention. Explosive growth in computing demand has driven up the business cycle for server, optical module, and other hardware supply chains. AI applications are accelerating their real-world deployment, with commercialization pathways becoming increasingly clear across office productivity, education, healthcare, and finance. On the policy front, government support for the AI industry continues to intensify, with multiple regions rolling out dedicated support policies that inject fresh momentum into the sector.

The STAR 50 Index's single-month surge of over 25% reflects the market's repricing of "hard-tech" enterprises. The STAR Market is home to numerous leading companies in semiconductors, AI chips, and high-end equipment, making them the first beneficiaries of this AI wave.

High-Stakes Game: Opportunity and Risk Coexist

However, rational risk assessment remains indispensable amid elevated market sentiment.

Valuation concerns: Some AI concept stocks have seen enormous short-term gains, pushing their price-to-earnings ratios well beyond reasonable industry ranges. Some companies that have yet to turn a profit have achieved lofty market capitalizations based solely on narratives and expectations, with bubble risks accumulating.

Capital flow dynamics: While daily limit-up moves represent strength, they are often accompanied by intense divergence. The phenomenon of "heaven-to-hell" reversals in consecutively limit-up stocks is common, and capital chasing highs can face steep drawdowns with the slightest misstep. Since April, many previously strong stocks have shown signs of stalling at high levels on heavy volume, indicating that major funds may be taking profits in stages.

Technical considerations: After the ChiNext Index broke through its high from a decade ago, there are no obvious overhead resistance levels for reference. Short-term price action will depend more on market sentiment and capital flows, and volatility is likely to increase significantly.

Investment Strategy: Focus on Fundamentals, Beware of Pure Hype

For investors, the current phase calls for adherence to several key principles:

• Distinguish genuine AI from hollow concepts: Prioritize companies with core technological moats and proven commercialization, while avoiding stocks that merely ride the hype without substantive business support.
• Focus on earnings delivery capability: The AI industry is gradually transitioning from a "storytelling" phase to a "show-me-the-numbers" phase. Q1 and interim earnings reports will serve as critical screening criteria.
• Manage position sizing and timing: With indices at new highs, going all-in to chase gains is inadvisable. Building positions in batches and setting stop-losses are effective risk management tools.
• Monitor policy and geopolitical developments: Changes in the U.S.-China tech rivalry and export control policies could directly impact critical segments such as AI chips.

Outlook: AI Remains the Mid-to-Long-Term Theme

Despite short-term correction pressures, from a mid-to-long-term perspective, artificial intelligence as the core driver of a new technological revolution is a trend far from fully played out. The global AI arms race continues to heat up, and China possesses unique advantages in large language models, application scenarios, and data resources, positioning related supply chains to benefit on an ongoing basis.

Market participants widely believe that the essence of this rally is a resonance between the "AI industrial revolution" and "improving liquidity." Against the backdrop of technological progress consistently exceeding expectations and continued release of policy dividends, the AI technology sector is poised to remain one of the most important investment themes in the A-share market for years to come.

But investors should remember: even the best sector requires a reasonable price. Staying calm amid market euphoria and seeking opportunities in undervalued areas — that is the path to long-term success.