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July Technology Market Review and August Market Outlook In July, the US tech stocks experienced significant volatility, with the Nasdaq closing the month down. High-momentum stocks suffered heavy losses but saw some recovery at the end of the month thanks to easing inflation and strong earnings reports from major companies. The market's trading logic has completely shifted; the phase of purely speculating on AI expectations has ended. Core of this round of adjustment: leveraged funds forced to sell 📉 This downturn is not due to deteriorating fundamentals; the key trigger was the forced liquidation of high-leverage AI positions. Fund stop-losses caused early capital flight, creating a negative feedback loop in the decline until large funds stepped in to absorb the sell-off, easing panic sentiment. Coupled with rising long-term US Treasury yields, high-valuation growth stocks remain under pressure. Quantitative investment styles have undergone historic rotation, with momentum factors sharply retreating, while cash flow and earnings quality stocks gradually attract capital. Tech giants' earnings diverge, AI valuation standards are being redefined ▶️ The market no longer unconditionally accepts capital expenditure expansion; whether AI investments can translate into revenue has become the core screening criterion: - Microsoft and Amazon: leveraging cloud ecosystem closed loops, computing power investments can be monetized externally, cloud business growth continues to exceed expectations, and the return path on investments is clear; - Meta: computing power is mostly used for internal business, lacking external revenue channels, continuous heavy investment consumes free cash flow; - Apple: hardware revenue is stable, but high-margin service business growth slows, combined with supply chain constraints, long-term growth expectations are limited. ▶️ Key storage sector highlights The storage sector led the pullback in July, with short-term trapped positions suppressing the market. The long-term demand logic driven by AI servers for HBM and enterprise SSD remains unchanged, and the market is likely to oscillate and bottom out. - SK Hynix: leading market share in HBM, high-end capacity locked with top AI customers long-term; - Micron Technology: continuously increasing AI storage capacity, with ample cash reserves; - SanDisk: benefits from steady expansion of data center NAND demand; - ChangXin Memory Technologies: leading domestic DRAM manufacturer, focusing on mass production of DDR5 and LPDDR series, high-end HBM is still in sample verification stage with a technology gap; the core focus is on domestic substitution potential. The popularization of open-source models will not squeeze upstream hardware profits. Models are like recipes, while computing power and storage are the underlying infrastructure. Lower model barriers generate massive AI call demand, ultimately benefiting hardware manufacturers continuously. 💡 August Market Judgment and Practical Strategy The month-end rebound is only an emotional repair and cannot confirm the end of the adjustment. Significant internal policy divergence exists within the Federal Reserve; interest rate trends closely follow inflation and employment data. US Treasury yield fluctuations continue to disturb the tech sector; market leverage clearing is not yet complete, so risks remain. The AI sector has officially entered the earnings verification period, and pure thematic stocks continue to be abandoned by capital. Operationally, prioritize deploying upstream infrastructure leaders with solid cash flow and clear AI monetization paths, keep sufficient cash reserves, and avoid high-leverage speculation. Volatility in the US stock market during summer and autumn is usually high; patience is far better than blindly chasing rallies. July's volatility squeezed out a large amount of speculative bubbles; the long-term industry trend remains unchanged. Subsequent market divergence will intensify, and only assets that can deliver earnings are more likely to have independent market performance. $MU $SNDK $SKHY