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Analysis: The extreme narrative of the "AI bubble" bursting in the short term is unlikely to manifest.
On November 24, Citic Securities reported that the decline in U.S. stocks on November 20 was dominated by macro factors, rather than panic selling triggered by an AI bubble burst. The main reason for this pullback is the better-than-expected September US Non-farm Payrolls (NFP) data combined with hawkish statements from the Fed, triggering profit-taking in the market; coupled with the marginal weakening of the U.S. job market, the December Federal Open Market Committee (FOMC) Meeting may peak the “hawkish panic” sentiment, after which the main market trading line may shift to Trump's nomination game for the new Fed chair. The fundamentals of the AI zone remain solid, and given the Token index-level growth, existing bottlenecks in the Supply Chain, and the strong cash flow and balance sheets of the four major tech giants, the extreme narrative of the “AI bubble” bursting is expected to be difficult to manifest in the short term. (Jin10)