STOCKS | Huatai Securities Advises Taking Profits on AI-Linked A Shares Amid Macro Repricing Risks

Huatai Securities said China’s A-share market has entered a short-term window marked by a lack of near-term catalysts in the AI supply chain and renewed macro risk repricing. According to Jin10, the brokerage said stronger-than-expected U.S. nonfarm payrolls data released last Friday led markets to price in tighter global liquidity, pushing U.S. Treasury yields and the U.S. dollar index sharply higher and triggering a notable pullback in risk assets such as the Nasdaq 100. Huatai added that weaker-than-expected guidance from overseas AI leaders and crowded positioning in AI-related trades contributed to signs of a style rebalancing. It said the market’s main focus has shifted from industry momentum to macro risk pricing. Based on historical episodes in which the Nasdaq 100 fell more than 2% alongside rising U.S. Treasury yields, Huatai said A shares face a relatively high probability of pressure on a monthly horizon. It said financial and value stocks may outperform, while growth stocks may come under pressure. On positioning, Huatai recommended moderately taking profits in AI-linked themes and waiting for volatility to ease before rebuilding exposure. It suggested rebalancing toward banks, as well as small metals and packaging and printing stocks that it said offer relatively attractive pricing after first-quarter earnings, based on the relationship between excess returns and changes in earnings per share.