Fidelity Says A-Share Tech Stocks Bottoming as Global AI Selloff Accelerates

Fidelity portfolio manager Nie Yixiang said A-share technology stocks are in a "bottoming phase," attributing the recent decline to crowded positioning and capital outflows rather than deteriorating fundamentals, amid a monthlong global selloff of AI shares. Nie said this year's third-quarter earnings show strong fundamentals, but new capital remains on the sidelines while A-share tech tracks U.S. rate cycles and geopolitical sentiment. He argued applications, not infrastructure, are more likely to produce "hundred-fold stocks," favoring companies with proprietary data in verticals such as healthcare, legal and finance and gross margins that can absorb inference costs. On AI model valuations, Nie said high rates are weighing on growth stocks, citing U.S. September CPI at 3.7% year-on-year and core CPI at 2.6%, both above expectations, increasing bets on Fed tightening. He noted optical module fundamentals remain strong on nonlinear computing demand, but negative headlines—such as an unconfirmed "65% U.S. content" rule—have been amplified in a fragile market. Chinese semiconductor self-sufficiency remains a long-term trend benefiting equipment makers. Nie recommended waiting for right-side confirmation over left-side bottom-fishing, accepting a possible 10-20% miss of the bottom in exchange for a margin of safety.