CITIC Securities says conditions for next tech stock rally are building, likely in Q4
In short
CITIC Securities said in a research report that conditions for the next round of a technology stock rally are gradually accumulating, and it kept a cautiously optimistic stance, Yicai and Jiemian reported on October 9. CLS reported the brokerage as saying the window for the rally to start is most likely the fourth quarter of 2026. It recommended watching Hong Kong-listed model iteration, internet platforms, hardware technology upgrades and domestic semiconductor equipment.
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CITIC Securities said in a research report that the conditions for the next round of a technology stock rally are gradually accumulating, and it maintained a cautiously optimistic stance, Yicai and Jiemian reported on October 9. CLS, also reporting on October 9, quoted the brokerage as saying the window for the next tech rally to start is most likely the fourth quarter of 2026. [ 1 , 2 , 3 ]
The brokerage said the transmission in the computing power industry from capital expenditure to return on invested capital to earnings per share ("CapEx→ROIC→EPS") has been preliminarily validated, and that capital expenditure growth in 2027-2028 will support rising earnings across the computing power chain, giving solid support to subsequent technology market moves. It also said faster RSI progress, major version iterations of domestic models and Meta Muse validating demand for consumer-facing agents are shifting market attention from infrastructure investment toward model capabilities, personal agents and application monetisation. [ 1 , 2 , 3 ]
According to Yicai and Jiemian, the report contrasted the current period with 2022, when high inflation and an aggressive rate-hike cycle brought simultaneous downward revisions of valuations and earnings. Although the US Federal Reserve and the Bank of Japan raised rates one after the other in September, the report said, recent US economic activity, AI capital expenditure and earnings of leading tech companies have stayed resilient, and the current global tech stock adjustment mainly reflects valuation contraction rather than earnings downgrades. It said EPS and cash flow remain the main line of market pricing, and that US tech stocks, supported by EPS, have already reached new highs even as long-term US bond yields have repeatedly hit new highs. [ 1 , 2 ]
Looking ahead to the fourth quarter, the report as carried by Yicai and Jiemian described October as a validation period for macro data, third-quarter results, new model iterations and the commercialisation of new products. CLS reported that the start of the next rally still needs three conditions to be validated: a marginal reversal in rate-hike expectations, consensus forming around a new narrative, and a completed rebalancing of funds. [ 1 , 2 , 3 ]
The brokerage recommended putting structure ahead of position size and pointed to structural opportunities in Hong Kong-listed model iteration, internet platforms, hardware technology upgrades and domestic semiconductor equipment. [ 1 , 2 , 3 ]
Why it matters
The report, carried by three business outlets, sets out a brokerage view on when and why technology stocks could rise again after a global adjustment. It ties that view to AI computing capital expenditure, domestic model iterations and October data such as third-quarter results, which it called a validation period.
Key facts
- CITIC Securities said conditions for the next round of a technology stock rally are gradually accumulating. [ 1 , 2 ]
- CLS reported the brokerage as saying the start window for the next tech rally is most likely the fourth quarter of 2026. [ 3 ]
- The brokerage said the computing power industry's "CapEx→ROIC→EPS" transmission has been preliminarily validated, and capital expenditure growth in 2027-2028 will support rising earnings in the computing power chain. [ 1 , 2 , 3 ]
- It said the current global tech stock adjustment mainly reflects valuation contraction rather than earnings downgrades, although the US Federal Reserve and the Bank of Japan raised rates in September. [ 1 , 2 ]
- It described October as a validation period for macro data, third-quarter results, new model iterations and new product commercialisation. [ 1 , 2 ]
- It maintained a cautiously optimistic stance and recommended putting structure ahead of position size. [ 1 , 2 ]
- It pointed to structural opportunities in Hong Kong-listed model iteration, internet platforms, hardware technology upgrades and domestic semiconductor equipment. [ 1 , 2 , 3 ]
Confirmed by several sources
- CITIC Securities said the computing power industry's "CapEx→ROIC→EPS" transmission has been preliminarily validated and 2027-2028 capital expenditure growth will support earnings in the computing power chain. [ 1 , 2 , 3 ]
- The brokerage said conditions for the next tech rally are gradually accumulating and it maintained a cautiously optimistic view. [ 1 , 2 ]
- It recommended putting structure ahead of position size and watching Hong Kong-listed model iteration, internet platforms, hardware technology upgrades and domestic semiconductor equipment. [ 1 , 2 , 3 ]
- It said the current global tech stock adjustment mainly reflects valuation contraction rather than earnings downgrades. [ 1 , 2 ]
Still unclear
- Whether the next tech rally will start in the fourth quarter of 2026. Only CLS reports the brokerage's view that the start window is most likely in the fourth quarter, and it says three conditions still need to be validated.
- What "RSI" refers to in the report. The outlets use the abbreviation without explaining it.
- The title and publication date of the research report. The outlets do not give them.