Today, semiconductors have fallen quite sharply. I believe many friends are not in a good mood when opening their accounts, and so am I I have reviewed JPMorgan's latest 'Flows&Liquidity' report and summarized it for everyone. JPMorgan Chase's overall view is optimistic. JPMorgan's latest "Flows&Liquidity" is a macro strategy report that analyzes the market from the perspectives of global capital flows, market positions, and liquidity. This report mainly discusses the development of AI trading and suggests that the market is entering a stage of internal rotation within the industry chain. Over the past year, the stock prices of semiconductor, HBM, and storage companies have consistently outperformed cloud vendors such as Meta, Microsoft, and Google, and this differentiation is difficult to sustain in the long run. Morgan believes that a more likely scenario is that as AI commercialization continues to advance, the profitability of cloud vendors gradually improves and their stock prices slowly catch up with the hardware sector; What the market is currently concerned about is another possibility. If cloud providers cannot keep up with capital expenditures in the future, it may slow down the pace of AI investment, thereby affecting hardware demand such as GPU and HBM. For this reason, Xiaomo has tracked multiple indicators such as short positions, GPU rental prices, token prices, etc., and believes that the market has indeed begun to discuss this risk, but at this stage, there is not enough evidence to prove that the AI industry has reached a turning point. At the same time, the liquidity in the United States continues to improve, and it is expected that M2 will increase by about $1.8 trillion by 2026. Banks' willingness to lend has increased, and the Federal Reserve's balance sheet has also slightly expanded again. In the absence of major black swan events, ample liquidity is still expected to continue supporting the US stock market, so Morgan's overall view remains optimistic. Based on today's market trend, let me also share my own understanding The biggest divergence in the market recently is focused on how the profits of the AI industry chain will be distributed in the future. In the past year, chips HBM、 The stock prices of these hardware companies have been leading, while the performance of cloud vendors is clearly lagging behind. As this gap widens, the market is beginning to worry about whether cloud providers can continue to maintain such high levels of capital expenditure in the future. Meta has recently reported renting out some GPU computing power, further amplifying this concern. Many people are starting to wonder if more and more big companies in the future will take out idle computing power for rent, which will affect the pace of the entire industry's procurement of new GPUs, HBMs, and storage. There are also reports that OpenAI is seeking more funding to support the construction of AI infrastructure. This also reflects that the development of large models still requires huge investment, and training and deploying advanced models is still a very expensive business. So today, the market is more focused on reassessing the profit expectations of the AI industry chain in the coming years and recalculating how much money each link in the industry chain can earn in the future. So far, I haven't seen any long-term logic change. The United States has not stopped investing in AI, and China is also continuously increasing its AI infrastructure construction. Each cloud provider has not announced any reduction in capital expenditures, and the core logic of HBM supply and demand tension, data center expansion, and AI inference demand growth are still present. In the short term, Meta's news has indeed cooled down the semiconductor sector a bit and provided an opportunity for the market to digest its emotions after consecutive gains. But for long-term investors, a fluctuation of one or two days will not change the value of a company in the coming years. What is truly worth paying attention to is the upcoming financial reporting season in July. No matter how much market discussion there is, it is not as convincing as the CapEx guidance, order situation, HBM supply and demand, and GPU delivery data in the financial report. If these data remain strong, many of the market's current concerns will naturally gradually dissipate. The process of rising will not be smooth sailing. Every bull market will experience various doubts, negative factors, and FUDs, washing out those who are not firm and moving forward. Next week, I will focus on the 575 position near the SMH daily EMA50, and I believe it is highly likely to be held here. Finally, let me share some of my own thoughts If you are making long-term investments, I don't think it's necessary to disrupt your pace due to a few days of fluctuations. I tend to hold the underlying stocks of high-quality companies or LEAPS with a maturity of over one year, and do not focus on short-term options. Short term calls not only need to determine direction, but also face the impact of time value and volatility. Many times, even if you look in the right direction, you may not necessarily make money. Short term trading is okay, but it should not be the main part of your portfolio. This needs to be emphasized again! The overall direction of AI has not changed, but the market is starting to pay attention to deeper issues such as how profits will be distributed in the future industry chain and whether cloud providers can maintain such high investment. These discussions are normal and are also stages that will be experienced in the development process of a new industry. I feel that the current stage is a bit like the second half of 1998 in the Internet era. At that time, the Internet had begun to change the world, but the real explosion was still to come. This analogy will not be exactly the same, and history will not simply repeat it. I just feel that we are still in the process of developing a long-term industry trend, and we may only be halfway through. There is still a distance of at least 1-2 years before the end, and I will patiently hold on until the end of next year. At present, both S&P and Nasdaq have not deviated from their historical ranges in overall valuation, and corporate profits are still growing. There has also been no significant contraction in AI capital expenditures. In this context, I prefer to focus on the company's long-term competitiveness. The market receives new news and doubts every day, but it is still performance and profitability that drive the long-term rise of stock prices. Manage your position well, do not easily fill up your position, and do not negate the entire trend just because of a pullback. Every time there is a big drop, you can buy some in batches according to your own plan. As long as there is no significant shift in AI capital expenditure and no change in industry trends, I will choose to continue holding and patiently wait for this AI wave to truly come to an end.