Group 1: Report Industry Investment Rating - The investment rating for US stocks is bullish [1] Group 2: Core Viewpoints of the Report - The current increase in US stock concentration is mainly due to investors' funds flowing towards leading technology companies. The root cause of the risk is not the concentration increase caused by industry structure changes, but the excessive concentration of funds and the over - payment of value premiums for leading companies [1] - The high - concentration stage of US stocks is still fundamentally driven. The market capitalization expansion of leading technology companies is supported by profit growth and capital returns. In the short term, this structural feature will continue to support market returns [5] Group 3: Summaries based on the Table of Contents 1. Historical Lessons of the Increase in US Stock Concentration: Nifty Fifty and the Dot - Com Bubble - Market concentration significantly increased during the "Nifty Fifty" in the 1970s and the dot - com bubble in 2000. In the 1970s, the valuation premiums paid for the stability of leading enterprises returned to the mean in a high - interest - rate environment. The dot - com bubble burst because the cyclical demand in the technology industry was difficult to sustain, and the tightening of the interest - rate environment accelerated the decline of the capital expenditure cycle [2] - During the "Nifty Fifty" in 1970, investors over - paid for the certainty of leading enterprises. In the 1973 - 1974 Fed rate - hiking process, the valuation bubble burst, and most leading stocks fell by more than 50%. The decline was mainly due to the correction of leading enterprises' valuations rather than profit pressure [26][29] - In the 2000 dot - com bubble, the demand for computer hardware and network equipment was over - drawn in the short term, and many Internet companies had no stable profits. After the interest - rate environment tightened, profits declined rapidly, and high valuations could not be supported [39] 2. The US Stock Market Structure Further Increases Market Concentration - Institutional investors in the US stock market have more pricing power. Constrained by capital volume and performance evaluation systems, funds prefer large - market - capitalization momentum stocks. The rise of ETFs also causes funds to flow passively to leading enterprises, further increasing market concentration [3] - The trading structure of the US stock market is conducive to large - market - capitalization companies attracting funds. The trading volume of institutional investors accounts for about 80%, and they have stronger pricing power. Retail investors prefer small - market - capitalization and high - turnover companies [59][60] 3. Is the Current Concentration Reasonable? - The increase in concentration is greater than the increase in index valuation, indicating that leading technology companies are not the main source of valuation pressure. Current profit growth is gradually digesting valuations. There is no significant risk of a bubble in the current AI market [4] - In a high - interest - rate environment, the US economy is slowing down, but the AI industry has high certainty and growth potential. The profit margins of leading technology companies are increasing, and the value premium brought by fundamentals may continue to exist [70] - Although the current interest - rate environment weakens the support for valuations, it does not pose a significant risk. If leading technology companies maintain their valuation premiums, the proportion of Mag7 in the index may further rise to 41% [4][73] 4. Investment Recommendations - The high - concentration stage of US stocks is still fundamentally driven. Leading technology companies in the AI industry chain still have allocation value, and the Nasdaq 100 is expected to outperform. However, attention should be paid to the increased sensitivity to industry risks and systemic fluctuations after the increase in index concentration. It is recommended to avoid chasing high prices blindly, buy on dips, and hedge potential risks when volatility is low [5]