2025 A-share Hard Tech Breakthroughs Trigger Reconstruction of Valuation Logic and Investment Style

In 2025, the A-share market underwent a substantial reconstruction of valuation logic and investment style catalyzed by hard tech breakthroughs. Starting from the “Year of Computing Power” ignited by DeepSeek, capital confidence in high computing power, AI reasoning, and domestic substitution continued to rise, driving the valuation of related targets from the past “cycle + cheapness” driven to “future growth + strategic position” pricing; Cambricon’s stock price once exceeded Kweichow Moutai, reflecting the market’s willingness to pay a higher discounted present value of future cash flows for hard tech enterprises; commercial aerospace receiving support from the fifth set of standards on the Science and Technology Innovation Board further verified the institutional level’s tolerance and encouragement for long-term, capital-intensive hard tech. Against this background, the adaptation method of value investment and growth investment was reshaped, and A-shares presented a dual-track valuation system of “low-position structural arbitrage” and "high-growth hard tech premium.

1. DeepSeek’s “Computing Power + Application” Value Chain
   : DeepSeek’s open, low computing power cost and strong reasoning ability quickly became the standard answer for AI infrastructure. Policies, capital, and industrial chains rapidly formed a closed loop around domestic computing power chips, AI hardware, small model optimization, and other links. The market transitioned from “future concept” to “specific demand”, enabling enterprises with verifiable revenue growth and computing power supply capacity to obtain higher valuation premiums. In this process, capital replaced “pre-policy expectations” with “post-verification growth” to measure enterprise value, leading to a general increase in the valuations of midstream and downstream leaders in the computing power chain [1].

2. The “Surpassing Moutai” Incident Reflects Valuation Differentiation
   : Cambricon’s stock price surged short-term in the middle of the year to a position far exceeding traditional leaders in market value, which not only reflects the emotional projection of the tech theme but also exposes the market’s pricing preference for “future track space far larger than current profits”. Funds quickly shifted from low-growth, large-cap blue chips to hard tech small giants with “long-term production capacity + core algorithms”, reflecting the style of “a few people earn more” in the structural bull market: if you miss high-elasticity tracks like AI and rare earths, it is difficult to share the main uptrend gains [2]. At the same time, the valuation bubble risk under heat was gradually hedged: the market requires hard tech enterprises to provide profit realization paths beyond high-growth stories, otherwise high valuations will suffer rapid corrections, thus strengthening the dual verification valuation model of “growth + profitability” [4].

3. Evolution of Institutional Style
   : After the policy combination (such as “9·24”), tech growth stocks gradually shifted from liquidity-driven to industry trend-driven in three stages. From the initial “low valuation repair” to the later revaluation of “double high” (high R&D investment, high patent conversion) enterprises, institutions began to take “sustainable R&D results and industrial barriers” as the core of stock selection, reducing pure theme speculation. The valuation of hard tech targets was reshaped into the cash flow discount of “large reachable market space in the future”, rather than the traditional growth rate multiplier [4].

1. Capital Allocation
   : Hard tech events guided funds to reallocate from traditional large-cap and cyclical sectors to tech growth, computing power infrastructure, commercial aerospace, and other fields with high capital investment and long-cycle returns. The tilt of the Science and Technology Innovation Board’s new system towards “market value + R&D” access allows long-term R&D enterprises like commercial aerospace to obtain capital support before profits are fully realized, and encourages institutions to find “technical verifiability” as a risk control anchor in valuation premiums [3].

2. Valuation Elasticity and Earnings Verification
   : Facing “Cambricon-style” valuation, high-quality institutions added dual variables of “long-term market space assumption” and “production capacity realization path” to their modeling. On the one hand, they acknowledge that hard tech does not fully reflect profits in initial growth; on the other hand, they require traceable information such as revenue, orders, and partners in the short term to avoid valuation relying on pure sentiment or liquidity. As a result, the valuation logic shifted from the past “low P/E ratio” to “technical leadership + growth verification”.

3. Sector Rotation and Sentiment Management
   : The hard tech boom also triggered a more distinct sector rotation model: in the process of deepening AI application, funds circulate between segments with clear profit prospects (such as high-end optical devices, precision connectors, domestic GPUs) and basic research that still needs time, emphasizing “phased realization” rather than short-term speculation. Investors need to pay attention to both the hyperbola of “policy-driven + profit realization” and “sentiment high + valuation repair” to find switching opportunities between low-valuation hard tech small caps and midstream manufacturing [4].

Hard tech breakthroughs not only allow the market to reprice but also shape an investment framework of “long-termism + structural bull market”. The increased tolerance of the listing system for deep R&D fields like commercial aerospace makes it easier for future capital to invest in key core technologies; the demonstration of the AI computing power industry chain represented by DeepSeek and Cambricon promotes capital to find “verifiable growth paths” and “independent control” safety margins in valuation premiums. For investors, the new valuation logic means that they need to examine hard tech targets from the combined perspective of “phased results, profit verification, and technical barriers” and maintain sensitivity to regulatory and industrial policy nodes.

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[1] First Financial—“Going Viral, How Will DeepSeek Affect the Future of A-shares?” (https://www.yicai.com/news/102459773.html)
[2] 21st Century Economic Report—“Cambricon Surpasses Moutai to Become A-share King, Has Moutai Stepped Down from the ‘Altar’?” (https://www.21jingji.com/article/20250829/herald/e8bc2b42f899d4d8e2a804a5f398916c.html)
[3] Xinhuanet—“Operational Guidelines for Commercial Rocket Enterprises Applying the Fifth Set of Listing Standards on the Science and Technology Innovation Board” (http://www.xinhuanet.com/fortune/20251226/367aa0e1155c46c68addd813a0f028ee/c.html)
[4] Guosen Securities Strategy Weekly—“Weekly Strategy Thinking: From Low Valuation to Hard Tech” (https://pdf.dfcfw.com/pdf/H3_AP202502131643053018_1.pdf)