To The Moon

I. Performance and Valuation of Global Equity Indices

Data Source: Bloomberg, Complied by Tiger Brokers

II. Key Market Themes

i. DeepSeek Reshapes the Global AI Landscape: Rising Demand for Computing Power—Where Are the Future Opportunities?

• Recently, DeepSeek launched China's first large-scale AI model with inference capabilities comparable to OpenAI, at just one-tenth of the cost. This move has sparked widespread discussion within the industry, significantly boosting confidence in Chinese tech stocks while causing volatility in U.S. AI-related stocks.

• After two weeks of market digestion, discussions around DeepSeek have largely settled. Consensus has formed around computing power and NVIDIA $英伟达(NVDA)$ , with the realization that demand for computing power will not decrease but rather continue to rise. DeepSeek’s essence lies in efficient and cost-effective AI inference, intensifying competition among model developers and application providers, ultimately benefiting AI ecosystem growth. This trend is evident in the latest financial reports from Microsoft $微软(MSFT)$ , Google $谷歌(GOOG)$ , and Amazon $亚马逊(AMZN)$ , where cloud providers are significantly increasing capital expenditures.

• Thus, we believe the future of AI’s technological revolution presents three key opportunities:

• The core logic of the AI industry chain remains unchanged—semiconductors and chips continue to be the most certain investment sector at this stage; NVIDIA’s growth will ultimately depend on yield rates and shipment volumes.

• Downstream applications may experience a surge, with internet, data centers, and SaaS companies potentially seeing explosive profit growth driven by AI.

• The Greater China technology sector is likely to see a valuation boost, as DeepSeek has rekindled global investor interest in Chinese assets.

Data Source: Bloomberg, Complied by Tiger Brokers

ii. Diverging U.S. Economic Data, Tariff Impacts on Inflation Expectations, and an Uncertain Rate-Cut Path.

• Recent U.S. economic data for January revealed contradictions across different indicators. Manufacturing PMI returned above the expansion threshold for the first time in two and a half years, yet Services PMI cooled to 52.8, still above the threshold but below market expectations. Additionally, Friday’s non-farm payroll data significantly missed expectations, while the unemployment rate came in lower than anticipated. Moreover, wage growth unexpectedly exceeded forecasts.

• These conflicting data points reflect the complexities of the economy. The primary factor delaying the Federal Reserve’s rate cuts is persistent inflation, particularly stubborn service-sector inflation. While Services PMI showed slight cooling, the unexpected surge in wages added another layer of uncertainty. Furthermore, although January’s nonfarm payrolls appeared weak, substantial upward revisions to December and November figures paint a different picture. Despite seeming contradictions in recent economic data, the underlying strength remains intact.

Data Source: U.S. Bureau of Labor Statistics

• At the same time, while January's wage growth far exceeded expectations, the University of Michigan Consumer Sentiment Index unexpectedly declined. Correspondingly, short-term consumer inflation expectations surged to 4.3%, returning to late-2023 levels. A major driver of this shift could be Trump’s aggressive tariff policies.

• Although last-minute tariff hikes on Canada and Mexico were halted, we believe Trump’s commitment to tariffs should not be underestimated. During last month’s inauguration speech, he highly praised former U.S. President William McKinley, known for his strong tariff policies. Looking ahead, trade tensions may extend beyond China, Canada, and Mexico to include Europe, Japan, South Korea, and Southeast Asia. In this environment of uncertainty, the path for rate cuts remains unclear, and investors should remain cautious about U.S. stock market risks this year!

Data Source: CME Group, Tiger Brokers

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