Semiconductor and chip stocks surged on August 27, with Hygon Information Technology leading the charge with a gain of over 5%, while Montage Technology climbed more than 7%. Other notable advancers included Southchip Semiconductor, Puya Semiconductor, Zhongji Innolight, MetaX, and Longsys Electronics. The STAR Chip Index, which offers full-chain exposure to the chip industry with storage components comprising nearly half of its weight, advanced more than 2%, with the HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (589190) showing robust momentum.
On the news front, NVIDIA delivered earnings and guidance that substantially exceeded expectations. For the second quarter of fiscal 2027, the company reported revenue of $96.2 billion, up 106% year-over-year, while adjusted earnings per share reached $2.22, a 120% annual increase. The company guided third-quarter revenue to approximately $108 billion, plus or minus 2%, surpassing the market consensus of $105.15 billion. During the earnings call, NVIDIA offered an optimistic outlook for fiscal 2028, alleviating concerns that the AI spending boom might be losing steam. The CFO projected roughly 70% revenue growth for fiscal 2028, well above the market's prior estimate of 45%. Markets responded enthusiastically, with NVIDIA shares jumping over 5% in after-hours trading.
Additionally, TrendForce released its latest forecast indicating that global tech giants' capital expenditures on AI infrastructure equipment will reach $1.383 trillion by 2027, with 68% of AI infrastructure investment costs flowing into DRAM and NAND flash memory. Guotai Junan Securities research suggests that the storage industry has transitioned from a beneficiary of AI compute investment to a critical bottleneck constraining AI infrastructure development. The structural shortage driven by AI demand now permeates the entire supply chain, with the supply-demand gap continuing to widen.
On pricing, the moderation in third-quarter contract price increases should not be interpreted as a sign of cyclical peaking. The uptrend in prices is expected to persist into 2027. Long-term agreements do not constrain pricing upside; rather, they make price trends more predictable, trading short-term price elasticity for long-term earnings and cash flow visibility. Industry focus is likely to shift from single-quarter price and profit elasticity toward multi-year earnings sustainability and capital return levels supported by robust cash flow generation, driving a re-rating of the sector's valuation multiples.
The HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (589190) passively tracks the STAR Chip Index, covering core segments of the chip industry chain with storage, semiconductor materials, and equipment comprising 49.95% and 30.57% of the portfolio respectively (as of August 19, 2026), effectively capturing the industry trends driven by the continuous upgrade of AI compute infrastructure. Data sources include the Shanghai and Shenzhen stock exchanges. Note: The storage chip allocation refers to the combined weight of stocks within the fund's underlying index that are also constituents of the Storage Chip Index (980138.CNI), which stood at 49.95% as of August 19. Institutional views are sourced from Guotai Junan Securities' July 28, 2026 report titled "Storage Supply-Demand Gap Continues to Widen, High Profit Resilience Supports Long-Term Cycle."
Risk disclosure: The HUABAO SHANGHAI SCI TECH INNOVATION BOARD CHIP TRADING OPEN ENDED INDEX SECURITIES INVESTMENT FUND (589190) and its feeder funds passively track the STAR Chip Index, with a base date of December 31, 2019, and a publication date of June 13, 2022. The index's returns over the past five full calendar years were 6.87% in 2021, -33.69% in 2022, 7.26% in 2023, 34.52% in 2024, and 61.33% in 2025. The index's volatility over the same periods was 34.32%, 36.60%, 28.64%, 44.67%, and 34.34% respectively. Index constituent composition adjusts according to index methodology, and backtested historical performance does not guarantee future results. The fund is issued and managed by Huabao Fund, and distributors do not bear investment, redemption, or risk management responsibilities. Investors should carefully review fund legal documents including the Fund Contract, Prospectus, and Fund Product Information Summary to understand risk-return characteristics and select products aligned with their risk tolerance. The fund manager assesses this fund's risk rating as R4 (medium-high risk), suitable for investors rated C4 or above. Performance of other funds managed by the same manager does not guarantee this fund's performance. Past performance does not indicate future returns. Funds carry risks; investors should invest cautiously! Distributors (including direct sales and other channels) conduct risk assessments per applicable regulations; investors should monitor suitability opinions issued by the fund manager. Distributor suitability opinions may differ, and distributor risk ratings cannot be lower than the fund manager's assessment. Risk-return characteristics in the Fund Contract may differ from risk ratings due to varying considerations. Investors should understand the fund's risk-return profile and make informed decisions based on their investment objectives, time horizon, experience, and risk tolerance, assuming all risks themselves. Registration with the CSRC does not constitute a substantive judgment or guarantee of the fund's investment value, market prospects, or returns. Funds carry risks; invest cautiously.