On September 12, the market showed divergent performance with the Shanghai Composite Index ending down 0.12% after reaching intraday highs, while the ChiNext Index retreated 1% following yesterday's strong gains. Total market turnover reached 2.55 trillion yuan with continued volume expansion.

The hard technology rally was concentrated in semiconductor chips. Foreign media, citing sources, reported that Alibaba and Baidu have begun using self-designed chips to train their AI models, partially replacing NVIDIA-produced chips. This development could mark a significant turning point in the AI sector, with domestic AI entering an accelerated substitution cycle.

The AI ETF (589520), which focuses on domestic AI industry chains, surged in response with intraday gains reaching 3.78%. Heavy holding Cambricon rose over 7% and topped A-share trading volume, while VeriSilicon hit the 20% daily limit.

Alibaba continued its multi-day rally, reaching nearly 4-year highs in both US and Hong Kong markets. Alibaba's latest quarterly cloud revenue and capital expenditure both exceeded expectations, with continuous investments in cloud and AI infrastructure and Qwen large model iterations providing ongoing catalysts. Combined with September Fed rate cut expectations, global capital may refocus on Chinese tech giants, with AI themes potentially becoming the core engine of Hong Kong's current rally.

The Hong Kong Internet ETF (513770), a core Hong Kong AI investment tool, gained over 2% in early trading, reaching new highs since listing. The fund has attracted intensive capital inflows recently, with nearly 2.8 billion yuan in net inflows over the past 20 trading days.

Other market segments showed cyclical materials and real estate making comebacks. The Commodity ETF (159876) gained over 3% intraday before closing up 2.29%, while the Real Estate ETF (159707) continued rising over 1% for six consecutive trading sessions.

Notably, innovative drugs rebounded quickly after yesterday's decline. The Pharma ETF (562050) focusing on A-share innovative drugs and the Hong Kong Connect Innovative Drug ETF (520880) with 100% innovative drug exposure both surged over 1% intraday. Analysts note that for high-growth innovative drug sectors with improving fundamentals, declines may present buying opportunities.

**Oracle's Giant Leap Ignites Domestic AI Three-Day Rally**

Semiconductor strength led domestic AI gains! The AI ETF (589520) focusing on domestic AI industry chains reached intraday highs of 3.78%, closing up 2.47% for three consecutive trading sessions. Daily turnover reached 63.51 million yuan with active trading.

Among constituents, VeriSilicon hit the 20% daily limit; Cambricon surged over 7% with 28.695 billion yuan in turnover, topping A-share volume; CloudWalk Technology gained over 3%, with Anlogic Technology and AUTEL following suit.

Three key developments drove AI momentum:

1. **Oracle's Massive Order Boosts Computing Power Expectations** On September 10, OpenAI signed a $300 billion computing power procurement contract with Oracle, one of the largest cloud computing deals in history. Industry insiders view this as a milestone transition from "quantitative" to "qualitative" change in global AI computing demand, representing long-term resource securing with computing power potentially becoming a strategic asset on par with oil and chips.

2. **Alibaba and Baidu Self-Developed AI Chips for Model Training** The Information cited four sources confirming that Alibaba and Baidu have begun using self-designed chips to train AI models, partially replacing NVIDIA-produced chips.

3. **VeriSilicon Acquires Nuclei to Strengthen ASIC Competitiveness** On September 11, AI ASIC leader VeriSilicon announced acquisition plans for 97% of Nuclei System Technology, which will supplement RISC-V CPU IP capabilities and build a comprehensive heterogeneous computing platform.

Ping An Securities notes that amid US restrictions on advanced chip exports to China and pressure on domestic computing chips and large models, the urgency of domestic computing power substitution continues rising. Long-term chip security issues will remain subject to political tensions, making independent design, fabrication, and mass production of high-end AI chips inevitable trends.

**Alibaba Ignites Hong Kong Tech Rally**

Hong Kong markets continued rebounding with the Hang Seng Index gaining over 1% to new phase highs. Large tech leaders surged with BABA-W rising up to 6% before closing up 5.4% at nearly 4-year highs; Tencent Holdings, Kuaishou-W, and Bilibili-W gained over 2%, while Xiaomi Group-W rose nearly 1%.

The Hong Kong Internet ETF (513770) reached intraday gains over 2% to new historical highs, closing up 1.13% with 606 million yuan in daily turnover.

Developments included reports that Alibaba and Baidu have begun using self-designed chips for AI model training, marking China's rising AI foundational capabilities. Additionally, Alibaba's Tongyi Qianwen released the next-generation Qwen3-Next model architecture, achieving breakthrough computational efficiency with 80B total parameters but only 3B activation matching 235B flagship model performance.

Analysts highlight that chip supply and model iteration are core foundations for cloud computing acceleration and important catalysts for internet sector AI valuation re-rating. With policy inflection points and new AI logic emerging, internet sector valuation repair signals are clear.

With Fed rate cuts beginning and continuous AI catalysts, Hong Kong tech may see dual acceleration from domestic and foreign capital. Global liquidity loosening positions Chinese assets as potential global favorites, while southbound funds resume accumulating internet leaders. Over the past 20 days, BABA-W, Tencent Holdings, and Meituan-W dominated southbound net buying. Through September 11, Alibaba received net southbound buying for 15 consecutive sessions totaling over 37.1 billion Hong Kong dollars.

The Hong Kong Internet ETF (513770) has attracted intensive capital with 27.92 billion yuan in net inflows over 20 trading days, tracking the CSI Hong Kong Connect Internet Index with concentrated positions in Hong Kong tech and internet leaders.

**Innovative Drugs Swift Recovery**

Innovative drugs mounted strong rebounds with both A+H markets warming broadly. The Pharma ETF (562050) focusing on A-share innovative drugs and the Hong Kong Connect Innovative Drug ETF (520880) with 100% innovative drug exposure both surged over 1% intraday.

Capital flows reflected bullish sentiment with the Hong Kong Connect Innovative Drug ETF (520880) trading at premiums throughout the session. Despite yesterday's overseas negative rumors causing sharp volatility, over 160 million yuan flowed in during the decline, marking eight consecutive days of capital inflows.

Major constituents rebounded collectively with Canbridge Pharma gaining over 6%, China Biologic Products Holdings, BeiGene, and CSPC Pharmaceutical all rising over 2%. Additionally, Neowise and Chi-Med surged over 10%.

September 8 newcomer Yakang Pharma-B delivered stunning gains, soaring over 130% intraday before closing up 77.09%, with weekly gains exceeding 205% following core product Terogutinib breast cancer Phase II trial approval.

The Hong Kong Connect Innovative Drug ETF's tracking index refinement proved timely, explicitly excluding CXOs and expanding selection scope to capture small-cap potential stocks earlier, including newly added Yakang Pharma-B, MingMed Biotechnology-B, and MIRXES-B.

National Health Commission data shows China's new drug pipeline comprises over 20% of global totals, ranking second globally. Multiple domestic innovative drugs including Sugemalimab, Ensartinib, and Glumetinib have received approvals, while Brukinsa achieved international approvals across multiple countries.

**Risk Reminder:** Market volatility may intensify with short-term fluctuations not indicative of future performance. Investors must assess risk tolerance and invest rationally with proper position and risk management. Investment involves risks and requires careful consideration.