Industrial Securities(SH:601377) 智通财经网·2025-11-25 12:32Core Insights - The report from the Zhang Qiyao team at Industrial Securities indicates that the previous adjustments in the TMT sector have been substantial, with signs of recovery in the AI market as it begins to expand towards downstream applications in both China and the US [1][11]. Group 1: TMT Sector Analysis - The rolling excess return of the TMT sector relative to the entire A-share market has significantly narrowed, reaching a level of approximately -7.5%, which is consistent with historical bottoms [2]. - The trading congestion in the TMT sector has been adequately released, with the trading volume percentage dropping to around 28%, aligning with levels seen during previous adjustments [4]. - The current congestion levels in various AI sub-sectors have notably decreased, with most sectors now at historical lows, indicating a more favorable trading environment [5]. Group 2: Historical Context - The current TMT adjustment has been sufficient in both time and magnitude, with the maximum drawdown recorded at -13.7% over 35 trading days, which is comparable to previous adjustments that typically lasted 30-45 days with drawdowns around 15% [8][10]. Group 3: AI Market Dynamics - Since November, the AI market has begun to shift towards downstream software applications, driven by a change in industry narratives and advancements in global AI applications [11][14]. - Recent developments, such as Alibaba's confidence in domestic AI commercialization and Google's advancements in multi-modal capabilities, have catalyzed the penetration of AI into various sectors including content production, marketing, and e-commerce [14][16]. - The overall market sentiment towards the end of the year is expected to favor the AI downstream sector, providing a conducive trading environment [16].