"Storage Storm" Sweeps the Globe! "Fear of Heights" or Hold? Fund Managers Speak Out

Recently, catalyzed by the explosive surge in AI computing power demand, the stock prices of overseas storage giants have skyrocketed and quickly mapped into the A-share market, driving core storage-related targets to powerfully reach new historical highs.

This sweeping, cross-ocean resonant rally has directly produced the first “doubling fund” of the year, and many technology-themed funds and QDII funds with heavy positions in the storage sector have seen both their net asset values and their fund sizes rise significantly.

Faced with the market’s “fear of high” divergence caused by the short-term surge, several fund managers have clearly stated that this round of market performance is absolutely not a traditional cyclical rebound, but a substantive transformation in which AI is reshaping storage value. At present, the investment logic for the storage chip sector has fully evolved from the earlier “price competition” to “fundamentals delivering results.” In the face of the large and sustained incremental AI demand, the growth certainty of core storage assets has become the greatest confidence for professional investors.

“Storage Storm” Once Again Creates “Doubling Funds”

In the second quarter of the capital markets, a strong “storage storm” is sweeping across the globe. Recently, the stock prices of overseas storage giants represented by SanDisk and Western Digital have continued to surge; among them, SanDisk has even set a record of gaining over 40 times in more than a year since listing. The magnificent tech rally across the ocean has also quickly triggered a linkage effect in the A-share market. Recently, core storage chip targets represented by Jiangbo Long, Demingli, and GigaDevice (603986) have pulled away at a gallop amid the momentum of hitting historical highs.

As for funds, after a brief reshuffling in March, by the end of the first quarter, multiple technology-themed funds had taken top-to-bottom positions in storage leaders, and in the subsequent trading days their net asset values also surged rapidly.

As of May 8, GF Visionary Select’s year-to-date return reached 112.28%, making it the first doubling fund of the year. By the end of the first quarter, among this fund’s top holdings were optical communications companies such as Longfei Optical Fiber (601869) and Zhongtian Technology (600522), while storage-sector stocks such as Buwei Storage and Demingli also contributed heavily to net value. The inflow of funds also helped the fund scale expand rapidly: its scale was only 2.57 billion yuan at the end of last year, whereas its latest scale is 11.986 billion yuan. In just more than three months, it increased by 11.729 billion yuan.

In addition, funds such as Yongying Pioneer Semiconductor Intelligence and Oriental Alpha Technology Intelligence, which also hold heavy positions in Demingli, Jiangbo Long, Buwei Storage, and GigaDevice, have seen obvious jumps in both net value and scale this year.

Not only that, but multiple QDII funds have also “tasted success.” By the end of the first quarter, GF Global Select RMB had 121,200 shares of SanDisk; Ping An Asset Management Global Intelligent Technology had 83,400 shares of Western Digital. Among the holdings of the China Construction Bank (CCB) Emerging Markets Preferred fund are SK hynix, SanDisk, and Western Digital, among others. On May 6, the fund’s net value even rose by 12.43% in a single day.

Fundamentals Create a Super Cycle

Several fund managers pointed out that what gives storage chips the attribute of a “super cycle” is the surging AI wave that has come in full force. Lei Tao, fund manager at Debang Fund, said that this round of market is an inevitable result of AI reconstructing the storage supply-and-demand pattern—starting from the explosive growth in the demand for HBM (high-bandwidth memory) and other memory usage from AI computing chips. Storage original equipment manufacturers (OEMs) have shifted their strategic focus into business lines such as data centers. Globally, the world’s three major storage OEMs have proactively compressed general-purpose capacity and shifted toward AI demand. At the same time, based on lessons learned from past rounds of large-scale capacity expansion that led to supply exceeding demand and price declines, these OEMs are taking a relatively cautious stance toward capacity expansion in this super cycle.

Wu Hao, fund manager at Founder Fubon Fund, said that the fundamental driver behind the current explosion in the storage chip market is the environment of an AI “arms race,” in which demand for HBM and large-capacity DRAM for AI training/inference is growing exponentially. On top of that, supply-side concentration is very high (SK hynix + Samsung account for more than 90% of HBM). He noted that this is not a traditional cycle recovery, but AI reconstructing storage value—turning from a “supporting role” into a “computing power bottleneck.”

However, whether this is “speculation” or “fundamentals validation” has become a topic of ongoing debate in the rising market. Some analysts believe that compared with broad AI themes that are still lingering at the concept stage, the storage chip segment is showing tangible “both volume and price rising” along with “profit statement repair.”

Tian Guangyuan, fund manager at Harvest Fund, said that the current investment logic for storage chips has fully switched from “price expectations” to “substantive performance realization by enterprises.”

Tian Guangyuan pointed out that in the first quarter of 2026, the profit growth direction for A-share storage concept stocks is generally above 100%. In leading modules manufacturers with a high degree of linkage, net profit surged by dozens of times or even more than a hundred times. This fully proves that industry logic has moved from expectations into the stage of substantive performance release. When confirming the investment timing, in an industry with such high profit volatility, whether corporate profits can continue to outperform expectations is more important than simply looking at static valuations.

US Stock Rally Reshapes A-Share Valuation Logic

Previously, many institutional investors held a cautious attitude toward the rapid gains of AI, and even the storage sector. However, several fund managers said that the overseas individual stock rally may provide some reference and inspiration for A-share investments.

“Overseas leading companies have continued to run strongly due to the combined effect of five factors: price, profit margins, capital expenditures, long-term contract prices, and technological leadership. The market is no longer only looking at quarterly prices, but at whether high profitability can be sustained until 2027 or even longer. Mapped to A-share investing, storage can no longer be viewed solely as a pure cyclical trade; it should be examined around three lines: the sequence of profit realization, the switch in growth valuations, and the spillover of expansion capital expenditures,” Cai Luping, fund manager at Yongying Fund, said.

From Wu Hao’s perspective, the sustained strength of overseas core tech assets provides the following forward-looking implications for A-share investment: first, when judging industry cycles, attention should be paid to demand persistence and changes in capacity structure; second, the direction of A-share mapping should prioritize “high-end upstream pricing power + expansion elasticity,” focusing on core links such as HBM/DDR5 materials and equipment, enterprise SSD controller chips, and other key components; third, in the upward phase of the cycle, expansion by storage leaders and the window for domestic substitution may be expected to open earlier. It is necessary to dynamically track the order and price transmission pace, adjust valuation and allocation in a timely manner, and guard against the risk of pullbacks among some overvalued stocks within the sector.

Lei Tao believes that from a valuation perspective, the rise in the stock prices of overseas-listed OEMs benefits more from the continued upward revisions of EPS. Currently, the forward PE is still generally at single-digit levels. As long-term contracts are gradually being finalized, the market has begun to rethink the valuation framework of the storage industry. The storage module companies in A-shares that support overseas OEMs have also validated their earnings surge through outstanding first-quarter reports. In addition, as for China’s domestic substitution in storage going forward to compete with the three major OEMs in the global market, this is also the general trend of the industry.

“This super cycle provides a rare window of opportunity for domestic companies to accelerate their catch-up. As China’s outstanding companies continue to break through in technology and capacity, the certainty of capacity expansion over the medium term is high. Among the semi-conductor equipment and materials that support expansion, there are still some links where domestic substitution rates are low, and there remain many investment opportunities,” Lei Tao said.

Amid “Fear of High,” Fund Managers Remain Firm in Holding

As the relevant underlying assets have accumulated huge gains in the short term, market sentiment inevitably produces voices of “fear of high.” Recently, some public fund sales representatives told reporters: “Our company’s technology-themed products are selling very well recently, but we’re also concerned about the problem of ‘easy to distribute, hard to execute.’ At the moment, valuations in the technology sector have reached historical highs. For some popular tracks, the P/E percentile is approaching even exceeding the historical 99% mark. That means that issuing at this time could create the risk that funds will flood in concentrated at the emotional peak, leading to the risk of building positions at high levels.”

However, as professional investors holding heavy positions in US stocks or A-shares, some fund managers are still firmly optimistic about the storage sector.

“It’s undeniable that after the rapid rally earlier, the market has already priced in expectations for rising unit prices of storage products. The marginal stimulus from soaring prices is gradually weakening. However, the biggest blind spot the market has right now is that it has severely underestimated the explosive power and persistence of storage ‘volume’ driven by AI. Unlike the past linear growth that depended on traditional consumer electronics such as smartphones or personal computers, the AI-driven storage demand in this round follows the exponential fragmentation of large model Tokens scale very closely,” Tian Guangyuan pointed out.

Industry data shows that Tokens scale can double every three months. Tian believes that this incremental space—directly converting underlying computing power into massive data throughput (603138)—is bottomless, and there are no signs that this growth rate will be falsified. Coupled with a supply-side capacity expansion lag of more than two years and HBM continuing to absorb traditional capacity, the global storage market’s supply-and-demand tightness cannot be fundamentally alleviated before 2028. Therefore, the so-called “overdraft” remains at the level of superficial price competition. The industry’s long-term growth expectations for “volume” have not yet been fully recognized and priced by the market.

“Whether an enterprise’s valuation can be supported by fundamentals hinges on three points: whether profits are sustainable, whether upward revisions of earnings can outpace the stock price increase, and whether the marginal rate of profit growth is weakening.” Cai Luping also believes that, overall, the current valuation of the storage sector is relatively reasonable. The price increases in storage in Q1/Q2 2026 have continued to exceed expectations, and new effective capacity on the supply side is still limited. AI demand and the reinforcement of long-term contract mechanisms have improved visibility into profitability. The industry’s trading logic has moved from “price increase expectations” to the stage of “profit realization + continued sustainability validation.”

(Editor: Li Yue)

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