Global equity assets generally saw a correction this month, with the technology sector being particularly hard-hit. Discussions around an “AI bubble” have also heated up again. We believe the current correction is primarily driven by the diminished cost-effectiveness of the technology sector after its significant prior gains, where most individual stocks have stretched valuations and need a moderate pullback to attract new capital inflows. There is no full - scale bubble in the AI sector as a whole. Although localized overheating may exist, it is undeniable that the AI technological trend is still advancing at a rapid pace.

Looking ahead to 2026, we are more constructive on the AI application layer. The launch of Google’s next-generation model and the evolution of multi-modal technology will spawn a large number of new application scenarios. Meanwhile, device‑side AI products integrated with AI technology will be gradually launched into the market, where directions such as smart glasses, AI‑enhanced phones, and headphones deserve focused attention.

We have accordingly increased our allocations to related areas in the investment portfolio.