Markets showed renewed strength on the morning of September 25th, with the ChiNext Index rising 2%. The ChiNext 50 approached historical highs while the STAR 50 also remained active. Technology gaming and internet e-commerce concept stocks led the gains.

On the trading floor, CATL, New Easy, Zhongji Xuchuang, Hygon Information, and Cambricon demonstrated strong performance. Capital continued to flow toward technology leaders. CATL surged over 5% at one point, reaching new highs with a total market capitalization exceeding 1.8 trillion yuan, surpassing Kweichow Moutai. By midday close, it traded at 398.86 yuan per share.

Hong Kong stocks also showed strength. Following Alibaba's momentum, JD.com Group-SW expanded gains by over 7% at one point, trading at 142.4 Hong Kong dollars per share. JD.com CEO Xu Ran stated that the company will continue investing over the next three years to drive a trillion-yuan artificial intelligence ecosystem. Analysts believe that major companies' expanding "capital expenditure" expectations are the primary driver behind the recent strength in AI sectors.

**Technology's Strong Performance Continues**

Despite many investors adjusting strategies before the holiday, the technology sector's explosive growth steadily supported indices. CATL, New Easy, Zhongji Xuchuang, and Sungrow Power Supply supported the ChiNext Index; CATL, Zijin Mining, New Easy, and Hengrui Medicine supported the CSI 300; while Cambricon, Hygon Information, Advanced Semiconductor Engineering, and Roborock supported the STAR 50.

Against this backdrop, although over 3,000 stocks declined across the market, it couldn't prevent index strength. In the current market, without exposure to technology-related stocks, profits are difficult to achieve; without large-cap technology stocks, beating the index becomes challenging.

Today's trading session saw two major drivers for batteries and artificial intelligence.

First, Chongqing's Development and Reform Commission publicly solicited opinions on "Several Policy Measures Supporting High-Quality Development of Power Battery Recycling Industry (Draft for Comments)." The draft emphasizes cultivating and strengthening leading enterprises in comprehensive battery utilization with advanced technology and equipment, standardized management operations, outstanding innovation capabilities, and strong leading influence.

Second, the 2025 JD Global Technology Explorer Conference (JDD) was held at the Zhongguancun International Innovation Center in Beijing. JD.com Group Vice Chairman and CEO Xu Ran announced a comprehensive upgrade of the large model brand Joy AI, launching the shopping and lifestyle assistant "Jingxi," the universal digital assistant "He She It," and the embedded intelligent application "JoyInside." Subsequently, Xu Ran demonstrated ordering 100 cups of coffee for 1,694 yuan using "He She It" from his own account for attendees to collect. Xu Ran stated that continued investment over the next three years will drive a trillion-yuan artificial intelligence ecosystem.

Alibaba CEO Wu Yongming revealed yesterday that over the next three years, the company plans additional investments beyond the planned 380 billion yuan to further strengthen computing infrastructure. Wu also projected that by 2032, Alibaba Cloud's global data center power consumption will increase tenfold compared to 2022.

**Capital Expenditure Creating Bubbles?**

On September 24th, Morgan Stanley predicted in a research report that Alibaba Cloud will add over 3 gigawatts of new data center capacity annually from 2026 to 2032, nearly equivalent to China's entire market addition in 2025. This will provide sustained and strong growth momentum for infrastructure suppliers including data center operators.

Microsoft, Meta, Google, and Amazon's capital expenditures have shown explosive growth recently, with increasingly ambitious narratives. Specifically, their 2024 capital expenditures exceeded $200 billion, with 2025 expected to approach $400 billion. Reports predict this growth trend will continue at least until 2030, when the four companies' combined annual capital expenditures may exceed $500 billion.

Against this backdrop, US stock markets have also demonstrated continuous technology stock rallies with capital concentrating in large stocks. Therefore, if this represents a bubble, US markets might experience volatility first. How will US stocks ultimately perform?

Beyond Federal Reserve Chairman Powell's warning about "overvalued stock markets," Goldman Sachs stated that despite strong AI fundamentals, hedge fund positioning in the "Magnificent Seven" and AI beneficiary stocks has reached the 90th percentile in crowding, with related position ratios approaching historical peaks from mid-2024.

However, Bank of America strategists believe the S&P 500's high valuations represent a "new normal" rather than a bubble. Bank of America noted that by 19 of the 20 internal indicators it tracks, the S&P 500's valuation appears statistically "expensive," with four metrics reaching historical highs. However, current S&P 500 constituent characteristics—including lower financial leverage, reduced earnings volatility, higher efficiency, and more stable profit margins compared to previous decades—help support current elevated valuations. "The S&P 500 has changed significantly compared to the 1980s, 1990s, and early 2000s," noted Bank of America's Head of Equity and Quantitative Strategy Subramanian. "Perhaps we should view current valuations as the new normal rather than expecting them to revert to historical levels."