The A-share market is currently undergoing a period of consolidation and adjustment under the influence of multiple factors, with investment opportunities in the technology sector becoming increasingly differentiated. However, the latest perspectives from several global investment institutions indicate that they continue to hold a positive outlook on the long-term trajectory of A-shares, driven by ongoing advancements in technological innovation, advanced manufacturing, and AI infrastructure development, while shifting their allocation focus toward select stocks with sustainable earnings and solid fundamental drivers.

Ian Samson, fund manager at Fidelity International, noted that as AI accelerates, it is gradually becoming a critical theme within the infrastructure sector. Mainland China is expanding its footprint in hardware, optical communications, energy storage, and other digital infrastructure-related fields. "The investment opportunities in mainland China are extremely diverse," Samson remarked.

Neuberger Berman believes that the current foreign capital allocation logic is transitioning from "theme-driven broad rallies" to "fundamental-driven stock selection." The firm continues to favor the long-term prospects of A-shares, suggesting that for many assets without clear supply-demand blemishes, the present environment represents a "golden pit" — a window of undervaluation. On the allocation front, Morgan Stanley recommends a "barbell" framework, balancing positions in structural technology and industrial growth tracks alongside high-quality, high-dividend-yield assets. Neuberger Berman, meanwhile, is focusing on pharmaceutical innovation chains, precious metals, energy and chemicals, agriculture, and quality low-volatility dividend stocks, while tracking industrial progress and earnings-recovery opportunities in niche areas such as robotics, commercial aerospace, and software.

Global institutions generally concur that the rapid development of technological innovation, artificial intelligence, and advanced manufacturing is boosting the investment appeal of mainland China and the A-share market. Anthony Kwok, Chief Investment Officer for Asia at HSBC Private Banking and Premier Solutions, stated that technology and innovation are primary drivers of Asia's economic growth. Mainland China's manufacturing strengths benefit from multiple catalysts, including policy support, rapid technological advances, and the growth of open-source AI models, coupled with large-scale investment in robotics, which helps cement the country's leading position in global manufacturing. At present, mainland China is undergoing a massive transition toward advanced manufacturing, with notable progress in renewable energy, green technology, electric vehicles, and biotechnology.

In its report titled "China Emerging Frontiers: China's Next Industrial Revolution," Morgan Stanley introduces the concept of "Industrial 5.0," arguing that China is evolving from the "world's factory" into a global industrial operating system, integrating industrial scale, automation, AI, full supply chain depth, and global expansion capabilities. Morgan Stanley projects that China's industrial capital expenditure will total approximately $50 trillion (around RMB 340 trillion) between 2026 and 2035, with Industrial 5.0 contributing about $12 trillion (roughly RMB 80 trillion) in incremental spending. Investment will be directed toward AI, power and digital infrastructure; factory automation, robotics, sensors, control systems, and industrial software; as well as strategic capacity and frontier industries such as semiconductors, advanced materials, energy, and transportation.

Regarding the overall trajectory of A-shares, Neuberger Berman believes that the second half of the year will see a three-way tug of war involving policy expectations, earnings validation, and external disruptions. The market is likely to experience a range-bound consolidation without systemic risks, though an ongoing tug-of-war over macro liquidity expectations will persist. On the policy front, the firm notes that steady-growth measures continue to intensify, with the "six networks" moving from planning and deployment to project coordination, investment and financing mechanisms, and actual construction. Financial support for the real estate sector is also being stepped up. Going forward, the market will closely monitor incremental policy space, alongside data on fiscal fund disbursement, commencement of major projects, equipment tenders, and property sales, to gauge the effectiveness of policy implementation.

On the earnings front, Neuberger Berman points out that based on interim reports, the overall earnings momentum in A-shares remains on an upward trend, with sectors like electronics, non-ferrous metals, and non-bank financials posting relatively strong profit growth. Market expectations for technology growth and resource-sector prosperity are increasingly being underpinned by actual earnings. The market will now focus on third-quarter and full-year earnings forecasts, and sectors where earnings can consistently materialize with reasonable valuations are likely to outperform.

"Externally, overseas interest rates staying high still put constraints on high-valuation growth sectors. However, global AI capital expenditure remains elevated, and opportunities in the tech sector will shift from broad-based rallies to internal differentiation driven by orders and earnings. Geopolitical factors could also dent market risk appetite through oil price movements and inflation expectations," Neuberger Berman commented. Extending the time horizon, the firm reiterates its bullish stance on the long-term trend of A-shares, citing the sustained AI industry momentum and supportive policy measures. For many assets without distinct supply-demand concerns, the current environment already constitutes a "golden pit."

Given the divergence among industries and companies, foreign institutions are placing greater emphasis on earnings realization, shifting allocation priorities toward fundamental-driven stock selection. In portfolio construction, Morgan Stanley recommends a "barbell" framework: one arm targets structural technology and industrial growth tracks, while the other arm allocates to quality high-dividend-yield names. "The first wave of capital expenditure benefits will be captured by upstream enabler firms, which currently offer the highest near-term earnings certainty, spanning semiconductors, optical components, industrial automation, high-end equipment, power systems, and certain materials." Morgan Stanley categorizes core beneficiary tracks into five major directions: industrial intelligence enablers (industrial software, automation equipment, control systems, sensors, robotics); self-sufficiency bottleneck tracks (wafer equipment, electronic design automation, CNC machine tools, precision metrology, advanced materials); frontier platform tracks (humanoid robots, autonomous driving, eVTOL, commercial aerospace); ecosystem export plays (new energy vehicles-batteries-charging, solar-storage-grid, turnkey smart factory solutions); and global industrial leaders (automotive, electronics, semiconductors, machinery manufacturing).

Neuberger Berman, on the other hand, believes the current allocation logic for foreign capital is shifting from "theme-driven broad rallies" to "fundamental-driven stock selection." Outside of technology, the firm is focusing on pharmaceutical innovation chains, precious metals, energy and chemicals, agriculture, and quality low-volatility dividend assets, while tracking industrial progress and earnings-recovery prospects in niche areas like robotics, commercial aerospace, and software. Lichang Li, head of market strategy at AllianceBernstein Fund, advocates a disciplined, bottom-up, and diversified allocation approach. In the AI space, he suggests focusing on export chains with global competitiveness and domestic substitution targets, while also paying attention to growth opportunities in applications and upstream infrastructure. Beyond the tech sector, innovative drugs, energy storage, and high-dividend and buyback names benefiting from structural reforms are also worth attention. "Through balanced allocation and careful stock selection, investors can harness the dividends of the AI industry while effectively hedging against concentration risks in any single theme, thereby capturing long-term opportunities in China's capital markets," Li said.