Great Wall Fund's Zhao Fengfei: The technology market trend is highly likely to continue into 2026, and market styles may become more balanced.

As 2025, the departing year, comes to a close, the technology industry has undergone many changes. This has helped propel tech stocks to become the market’s main storyline throughout the year. Toward the year-end, market volatility for technology themes such as artificial intelligence, chips, and new energy has noticeably intensified. As the debate over an AI bubble flares up again, the market’s focus has turned to the technology investment narrative for the new year.

Amid the fog, the Great Wall Fund’s 2026 annual investment strategy conference is set to arrive as scheduled. Zhao Fengfei, fund manager of the Great Wall Intelligent Industry Fund, has been deeply engaged in the “Technology+” space for many years, and at this strategy meeting she carried out in-depth discussions on popular questions in the technology investment field.

Regarding the performance of China’s tech stocks in 2025, Zhao Fengfei summed it up with the two words “breathtaking” and “impressive.” She believes the core driving force behind this market is global technological change and China’s breakthrough progress in the technology industry. The sector rotation throughout the year is clear, and each wave of gains is basically supported by solid industrial logic—this market is brought about by the overall improvement of China’s technology strength.

Can the technology rally in 2026 continue? This is the fundamental question that investors care about most. In response, Zhao Fengfei believes the rally will most likely continue, but the market style will be more balanced. Zhao Fengfei judges whether the market can rise hinges on whether investment on the industrial front will stop; currently, the capital expenditures of leading cloud companies both at home and abroad are still being pushed forward at a high intensity. This kind of rigid investment is the solid “keystone” supporting the tech stock rally; when mapped to the capital market, the continuity of the rally naturally has support.

On this basis, Zhao Fengfei believes next year’s tech stocks will show balance across three dimensions:

First, in the computing power sector, computing power both domestically and overseas is moving toward balance. In the past few years, overseas computing power stock performances have seen significant gains; it will become harder for them to continue delivering large-scale increases afterward. Meanwhile, domestically produced computing power is entering a critical breakthrough period. Revenue and profit are about to enter a phase of significant release, and it is expected to accelerate its push to break through.

Second, structural balance within the AI field. Over the past three years, the market’s investment focus has been concentrated on infrastructure-type enterprises such as “shovel-selling” companies like those in computing power. After years of long-term layout, infrastructure construction has become increasingly well established, and the conditions for batch explosions of applications at the application layer are gradually becoming mature. In 2026, AI applications are expected to achieve substantive breakthroughs.

Third, within the technology sector, more balanced development between AI and non-AI areas is expected. As AI is the mainstream topic in the industry, it has already been represented in the capital market for three years and has achieved impressive results. Meanwhile, new sectors such as commercial spaceflight and quantum computing—if subsequent industry changes emerge—could have phased performance that is no worse than AI.

When discussing the specific sub-directions that Zhao Fengfei favors in the technology sector, she clearly points out that in 2026, the three major directions will reach key milestones. First is solid-state batteries, which are expected to enter the first year of small-batch mass production, kick-starting technology iteration in the power battery field. Next is commercial spaceflight: reusable technologies will likely achieve major breakthroughs, helping to resolve the capacity bottleneck in the construction of satellite internet and paving the way for grand scenarios such as space computing power. Additionally, there are AI applications: as model performance improves, AI Agents will move into a usable critical point, becoming an important tool for enabling industries. If the outlook is broadened to the “15th Five-Year Plan” period, the potential of quantum computing should not be underestimated.

Zhao Fengfei stated that once quantum computing achieves a commercialization breakthrough from 0 to 1, it will trigger a chain reaction: the encryption mechanisms of existing cryptocurrencies may be quickly cracked, forcing the entire industry to rebuild its cryptography system and driving explosive growth in the information security sector. At the same time, quantum computing will overcome scientific computation problems that are difficult for classical computers, becoming a super engine that pushes progress across the entire industry.

Disclaimer: The information contained in this communication is sourced from channels that our company considers reliable and from the personal judgments of our researchers; however, our company does not provide any direct or implied statements or guarantees regarding its accuracy or completeness. This communication is not a complete or comprehensive description of relevant securities or the market. Any opinions expressed may change and will not be notified separately. Recipients should not treat this communication as a substitute for their independent judgment or as the basis for investment decisions. Neither our company nor any of its related organizations, employees, or agents shall bear any responsibility for any losses incurred by any person arising from the use of all or any part of the contents of this communication. Without the prior written permission of Great Wall Fund Management Co., Ltd., no one may distribute, copy, repost, or publish this report or any part of it in any form, nor may they make any deletions or modifications to this communication that are contrary to the original intent. The fund manager reminds that every citizen has the obligation and right to report money-laundering crimes. Every citizen should strictly comply with relevant laws and regulations regarding anti-money laundering. Funds involve risks; invest with caution.

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Responsible editor: He Junxi