Morgan Stanley Fund: Expect market liquidity to be relatively favorable for the broad technology sector this year, and anticipate growth in AI, defense, and military industries.

MS Morgan Stanley Fund said it was relatively optimistic and confident about the pan-tech sector in 2025. The risk appetite of technology stocks for the market is very high, and the risk appetite of A-share market as a whole is difficult to return to the previous low after various policies since September 2024. In 2025, mergers and acquisitions may boost the risk appetite of the entire market, perhaps similar to the TMT market in 2014-2015, once a company's mergers and acquisitions are implemented, its significant rise will drive the valuation level of its acquisition targets for the entire sector. Besides, from the perspective of liquidity, the latest monetary policy stance is moderately loose, and the market liquidity in 2025 is expected to be relatively friendly to the pan-tech sector. It is optimistic about the AI, defense and military industry, wind power, and consumer electronics.

From the perspective of the development cycle of the industry, the current technology industry has entered a very large innovation cycle, and AI has promoted innovation and iteration in the B and C ends of the industry. It is expected that the industry will still be in an innovation up cycle in the next few years. The valuation level of the technology sector is expected to be maintained, and the valuation may continue to rise if there are blockbuster applications. In the future, it will continue to choose sectors and companies with rising performance in the entire pan-tech field.

Specifically, from the tracking and comparison of Morgan Stanley's technology research team, among all the industries for horizontal comparison, AI is still expected to be the fastest-growing sub-direction in 2025, and the computing power and related supporting, AI application end will have many things worth looking forward to in 2025.

From the observation of overseas technology giants and domestic internet giants, their strong demand for computing power has not weakened. Besides, from the perspective of valuation, although AI has risen for two years, the valuation level of computing power and industry core targets in 2025 is not high compared with the valuation level when 4G upgraded to 5G. At present, the valuation of AI has not been inflated.

At present, computing power is still in the first half, and the pre-computing power industry will innovate in computing customization, power solutions in data centers, etc. in 2025, and bring investment opportunities. In 2025, there will be many related applications in the United States and other countries, and the explosion of these end-side applications will also drive the valuation of related sub-sectors in A-share market.