A-shares surge with high volume to reclaim 3,900 points! Computing power demand has increased a thousandfold in two years, and this main theme has completely caught fire.

Why has the demand for computing power surged a thousandfold within two years?

Key points: Today, the A-share market in China experienced broad volume increases, with the Shanghai Composite rising 1.3% to recover the 3,900-point threshold, and total market turnover reaching 2.19 trillion yuan, with over 4,800 stocks gaining. External geopolitical risks have eased, and internal fundamental expectations are improving, driving explosive growth in computing power demand. This has made “computing and electricity coordination” the strongest main theme, with the communication and non-ferrous metals sectors moving up simultaneously. In the short term, the market rally is likely to continue; in the medium term, focus will shift to transformation and upgrading sectors such as AI and advanced manufacturing.

Today (March 25), the Chinese A-share market delivered an impressive performance. By the close, the Shanghai Composite index rose 1.3% to 3,931.84 points, successfully reclaiming the 3,900-point level. The Shenzhen Component Index increased by 1.95%, the ChiNext Index by 2.01%, and the STAR 50 Index by 1.91%. Total trading volume across both markets for the day was 2.19 trillion yuan, slightly higher than the previous trading day, maintaining high market activity. Over 4,800 stocks rose, and the market’s profit-taking and growth effects were very prominent.

From the market structure perspective, growth stocks clearly outperformed. Among Shenwan Level-1 industries, the comprehensive sector led the gains with a 3.87% increase, followed by the communication sector up 3.71%. Non-ferrous metals, electronics, and social services sectors all gained more than 2.6%. Conversely, coal and petroleum & petrochemical sectors declined slightly, while banking and food & beverage sectors posted steady gains. The Hong Kong market also moved upward in tandem, with the Hang Seng Index up 0.88% and the Hang Seng Tech Index up 1.74%.

The core driver of today’s market rally stems from the resonance of two factors—internal and external. Externally, there are signs of easing in the Middle East situation, reducing concerns over escalation of geopolitical conflicts, which has lifted global risk appetite and boosted the Asia-Pacific markets collectively. Internally, the Boao Asia Forum’s flagship report explicitly states that Asia remains a major engine of global economic growth, with domestic fundamentals expectations continuing to improve, providing a solid underlying support for the market.

Among the many leading sectors, “computing and electricity coordination” has become today’s strongest main theme. Related concept stocks surged dramatically, with Huadian Liaoneng hitting limit-ups for eight consecutive days, and more than ten stocks including JinKong Power and ShaoNeng Co. Ltd. also reaching limit-up. This breakout is not accidental; it is supported by solid industrial logic. Data from China’s National Data Administration shows that China’s daily token call volume skyrocketed from 1 trillion at the start of 2024 to 100 trillion by the end of 2025. As of March this year, it has already exceeded 140 trillion, representing over a thousandfold growth in just two years. The rapid increase in computing power demand directly drives growth across the entire industry chain, including upstream power infrastructure, computing leasing, and optical communications.

Meanwhile, news that fiber optic prices have hit a seven-year high has directly catalyzed a rally in the communication sector, with nearly ten stocks such as FiberHome and Yangtze Communications hitting limit-ups. As the core hardware foundation of computing networks, demand for optical communication products remains tight, and rising prices further expand profit margins for related companies. The sectors of CPO and computing leasing are also active: Galaxy New Network reached a 20cm limit-up, and stocks like Aorid and Litong Electronics also hit limit-ups. China has set a new record in optical communication transmission, achieving real-time bidirectional transmission capacity of 2.5 petabits per second over a 10.3 km single-mode fiber with 24 cores, a technological breakthrough that acts as a catalyst for the sector.

The rise in non-ferrous metals is also noteworthy, closely linked to stable demand in domestic high-end manufacturing sectors such as new energy vehicles and semiconductors. On one hand, the penetration rate of new energy vehicles continues to increase, and demand expectations for lithium, cobalt, copper, and other industrial metals in batteries and energy storage are improving. On the other hand, the rapid expansion of overseas electric vehicle markets further supports long-term demand for these metals. Additionally, geopolitical conflicts have introduced supply-side uncertainties, supporting prices of certain non-ferrous metals.

Looking ahead, in the short term, market turnover is expected to stay above 2 trillion yuan, with active trading. The growth sectors are supported by clear industrial logic and performance fundamentals, providing a basis for continued short-term rally. However, uncertainties remain regarding overseas geopolitical conflicts, and fluctuations in upstream energy prices could disrupt market rhythm.

Trading strategy-wise, it is advisable to remain cautious in the short term and avoid chasing high. External risks have not been fully eliminated, so controlling positions and focusing on defensive assets is recommended. A “dumbbell” allocation approach is suggested—targeting high-dividend, low-volatility defensive stocks (such as banks and utilities) on one end, and oversold cyclical and policy-driven themes (such as chemicals and computing power) on the other. Buying in batches at low points of high-quality oversold sectors is prudent. Also, pay close attention to first-quarter earnings forecasts, prioritize stocks with high earnings certainty, and avoid chasing short-term speculative stocks with excessive gains.

In the medium to long term, the fundamental logic of the A-share market remains unchanged. AI computing power, advanced manufacturing, and other sectors representing economic transformation and security remain core themes. These sectors are supported by real industrial policies and fundamentals; after adjustments, they are more likely to lead the market into a new phase of growth. Specific directions include: first, within the tech growth theme, sectors with sustained growth prospects such as AI computing, optical communications, and energy storage; second, upstream resource sectors benefiting from “price increase transmission,” such as non-ferrous metals and chemicals—where multiple market themes converge; third, undervalued sectors with stable earnings, like consumer staples and pharmaceuticals, which can serve as defensive core holdings.

Note: The market involves risks; investments should be made cautiously. This article is based on publicly available information and does not constitute investment advice.

Author’s statement: The opinions expressed are personal and for reference only.