Performance verification becomes the core benchmark for investment in the second quarter

How Does AI Performance Verification Become the Watershed for Q2 Investments?

By Zhang Ju | Edited by Lin Weiping

As Q1 wraps up, the A-share market’s investment logic is entering a critical transition in Q2, and performance verification is expected to become the core keyword for this phase. After the Qingming holiday, institutional consensus is likely to become even clearer: the market will shift from early-year theme speculation to fundamental execution, and companies’ true profitability and order fulfillment will become the primary basis for capital allocation.

Judging from A-share historical performance, during the performance “vacuum” period from January to March, capital often uses expectations to engage in thematic contests. After the April window for the dense disclosure of financial reports opens, the market will rapidly shift from “trading expectations” to “watching reality.” The market structure in which 2017’s blue-chip stocks, 2021’s new energy sector, and 2023’s high-dividend plus technology trend together—all complete style reshaping in April.

This image may be AI-generated

In 2026, the market places even more emphasis on “separating the real from the false.” With the dual checks of annual reports alongside first-quarter reports, it becomes key for identifying the quality of companies. This stage is also referred to as A-shares’ “April Decision.”

This week, sector leaders such as BeiGene, Hengrui Medicine, WuXi AppTec, Baili Tianheng, and others saw their stock prices rise to varying degrees because of outstanding annual report performance. For example, BeiGene achieved annual profitability for the first time, WuXi AppTec’s net profit doubled year over year, and Hengrui Medicine’s innovative-drug revenue accounted for more than half.

The performance delivery of innovative drugs is only a snapshot of the validation results in the new-quality productive forces track. After multiple rounds of concept hype, the artificial intelligence industry chain is now entering a crucial period in which performance is “bearing fruit,” and the 2025 annual reports will serve as the touchstone for testing the quality of its development. For instance, as one of the leading AI companies, Cambrian achieved operating revenue of RMB 6.497 billion in 2025, up 453.21% year over year; attributable net profit of RMB 2.059 billion; and it turned profitable for the first time since listing, becoming a typical example of performance delivery in the AI track.

And from the perspective of the AI industry chain as a whole, the three sub-segments that perform most prominently are AI servers, storage chips, and compute-power chips. These tracks directly benefit from the exponential demand for compute power brought by the commercialization of large models, and the industry shows a strong momentum of “rising in both volume and price, with orders fully booked,” with financial performance far exceeding the industry average. On the STAR Market, Buwei Storage is one of the representatives: in 2025, its attributable net profit increased 429.07% year over year; revenue from AI emerging end-side storage products reached RMB 1.751 billion. It is expected that in the first two months of 2026, the year-over-year growth rate of net profit will be as high as 921.77% to 1086.13%, with the net profit amount already exceeding last year’s full-year total. Behind the surge in performance is the high industry prosperity supported by AI server demand for storage reaching 8 to 12 times that of traditional servers, as well as the company’s strategic plan to shift production capacity toward high-end products.

Compared with annual reports that reflect performance from the past year, the first-quarter report is the first financial report of the new fiscal year, which can more truly reflect a company’s early-year operating quality and growth momentum, and the market has already begun to recognize those that exceed expectations in terms of performance. For example, Wanfangde, a Shenzhen-listed company transitioning from generic drugs to innovative drugs, is expected to have attributable net profit of RMB 165 million in Q1 2026 and non-recurring profit of RMB 164 million; it turns from loss to profit year over year, with the increase as high as 2174.55%. Driven by this, the stock has delivered seven consecutive trading days of gains, with a full-year-to-date increase of 138%, surpassing last year’s full-year gain.

While closely tracking the performance main line, however, the Q2 performance verification period also hides certain investment risks—such as overvalued theme stocks, especially small-cap stocks that are driven purely by concept speculation. If their financial report performance is continuously disproven, they will face the risk of valuation being cut. In addition, investors also need to be alert to the risk of stock price adjustments for companies whose performance falls short of expectations or that face performance delisting risks under the new delisting rules.

April is both the period of intensive financial-report disclosures and the period when market styles are reshaped. Institutions have begun to dig deeper into high-quality targets with performance that is confirmed. For ordinary investors, only by using performance as the yardstick—carefully assessing the true operating “quality” behind the positions they hold—can they make a reasonable judgment about a company’s “stay or go” and the investment cycle, and thus capture opportunities with certainty as the market differentiates.

(This article has been published in the April 4 issue of 《Securities Market Weekly》. The individual stocks mentioned in the article are cited for illustrative analysis purposes only and do not constitute investment advice.)