By Niu Ben Recent fluctuations in the A-share market have led to frequent rotations among sectors. Industry insiders caution against blindly chasing after rising stocks during this phase and advise on focusing on high certainty investments. So, which sectors or individual stocks exhibit high certainty? (For detailed lists, see within the text.)

Focusing on High Growth Performance This week, each trading day has showcased some typical strong themes, such as rare earths and lithography machines on Monday, superhard materials and liquor on Tuesday, and Hainan free trade and duty-free shops on Friday. Simultaneously, the A-share market has shown significant polarization in stock performance; for instance, over 1,000 listed companies rose and more than 3,000 fell on both Monday and Tuesday, while on Wednesday, over 4,000 rose and fewer than 1,000 fell (see Table 1). Notably, Delixi Technology exhibited a rare pattern of fluctuating price movements on Friday.

This characteristic defines the volatile market, where capital struggles are more intense.

In response, Yan Huizong, who extensively researches the A-share market, advocates for a strategy that avoids blind chasing of rising stocks and instead focuses on high certainty investments, such as stocks with robust growth in their Q3 reports and an optimistic outlook for Q4 performance.

"The focus remains on growth style, specifically the AI sector, particularly on AI computational power, optical communication for computational power, and upstream optical chips for optical modules," Yan noted in a recent video. With the fourth quarter's trading period underway, the A-share market enters a phase of performance speculation.

Collectively Bullish Meanwhile, I have observed that numerous research institutions share an optimistic outlook on the AI sector. For instance, Citic Construction Investment recently pointed out that disruptions during the National Day holiday due to the US government shutdown led to further increases in precious metals like gold and silver, while a computational power revolution has driven up copper prices significantly. With a wealth of new AI products emerging, global AI competition is entering a new phase, shifting investment focus from specific key components to the establishment of comprehensive computational platforms and ecosystems. The Political Bureau meeting's summary indicates that the "14th Five-Year Plan" will continue prioritizing technology.

"Looking ahead, as the economic fundamentals remain stable, with continuous inflow of new capital into A-shares, easing global liquidity, and improved US-China relations, A-shares are likely to sustain an upward trend amidst fluctuations. Key sectors to focus on include AI, semiconductors, non-ferrous materials (precious metals, industrial metals), renewable energy, humanoid robots, innovative pharmaceuticals, and non-bank financials," Citic Construction Investment stated.

According to the ratings from research institutions, several companies within the AI sector have received "buy" ratings, including ZTE Corporation, Unisplendour, Crystal Optoelectronics, Northern Microelectronics, and Hikvision (see Table 2). Notably, the high-end processor company Haiguang Information has received joint recommendations from multiple research institutions, with products including Haiguang general-purpose processors (CPUs) and Haiguang co-processors (DCUs).

One Stock with Doubling Potential I have also noted that multiple A-share stocks have recently attracted various target prices from research institutions, indicating significant upside potential relative to their latest closing prices, particularly among AI sector companies. Among these, the stock with the highest increase potential is Gaweida.

Gaweida focuses on providing comprehensive, specialized, and continuous technology services for financial institutions. According to Dongwu Securities, the company has a stable upward trajectory in fundamentals and is a leading provider of financial informatization solutions in China. The company is actively pushing forward collaborations with Ant Group, focusing on banking credit scenarios, exploring the implementation of Financial AI Agents, and developing a second growth curve, thereby enhancing overall gross profit margins.

Dongwu Securities projects Gaweida's revenue growth will reach 23.4% by 2025 and, based on the PS valuation method, assigns a target price of 51.5 CNY for 2026. This represents a substantial 131.98% upside relative to the company's recent closing price of 22.2 CNY. Gaweida is currently viewed by research institutions as the only stock with the potential for doubling.

Additionally, several related stocks also exhibit over 50% upside potential, such as SMIC (see Table 3).

(The individual stocks mentioned in this article are for example analysis only and do not constitute buy or sell recommendations.)

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