Deepening Strides Toward Becoming a Technology Powerhouse

On June 18th, the A-share market experienced a historic milestone. By the close of trading, technology stocks claimed five of the top ten spots in terms of market capitalization—CATL, Foxconn Industrial Internet, Inno-Light, Cambricon, and YOFC. This marked the first time in over three decades that tech stocks had secured half of the A-share market's top ten by market cap. Looking back at the history of A-shares, such a collective ascent of tech stocks into the top ten is a rare occurrence. In today's A-share market, which boasts thousands of listed companies, five tech stocks simultaneously breaking into the top ten represents an unprecedented structural shift.

Transformation in Market Capitalization Landscape

At the close on June 18th, among the top ten companies by total market capitalization in the A-share market, Industrial and Commercial Bank of China led the pack with approximately RMB 2.46 trillion. Agricultural Bank of China and China Construction Bank followed closely behind. CATL ranked fourth, with a market capitalization exceeding RMB 1.86 trillion, making it the highest-valued tech stock. Foxconn Industrial Internet's market cap surpassed RMB 1.54 trillion, placing it fifth. Inno-Light's market cap was approximately RMB 1.53 trillion, ranking sixth. Kweichow Moutai fell to seventh place, with a market cap of about RMB 1.52 trillion. Cambricon's market cap exceeded RMB 940 billion, ranking ninth, while YOFC's market cap surpassed RMB 810 billion, ranking tenth.

More notably, on that day, Inno-Light's market capitalization surpassed that of Kweichow Moutai for the first time. Calculated at the closing price, Inno-Light's market cap exceeded Kweichow Moutai's by approximately RMB 7 billion. Following in the footsteps of Foxconn Industrial Internet, this tech company from the optical module sector now stands ahead of Kweichow Moutai. Some industry observers claim this marks "a moment when A-share market preferences have shifted."

Expanding the perspective, tech stocks occupy eight of the top 20 by market capitalization in the A-share market. In addition to the five mentioned above, they include Hygon Information, Naura Technology, and Luxshare Precision. Among the top 30, tech stocks further increase to 12. Wu Qing, Chairman of the China Securities Regulatory Commission, revealed at the 2026 Lujiazui Forum that the tech sector now accounts for over 30% of the total market capitalization in the A-share market. Among listed companies with market caps exceeding RMB 100 billion, tech firms now make up 45%.

Data indicates that at the beginning of 2024, only CATL represented the tech sector among the top 10 by market capitalization in the A-share market, with the remaining nine positions dominated by liquor, finance, and energy companies. Among the top 20, only three tech stocks—CATL, Mindray Medical, and Hikvision—were present. Entering 2025, driven by the AI theme, the "tech bull market" continued to unfold. By the end of the year, the number of tech stocks among the top 10 by market capitalization expanded to two (CATL, Foxconn Industrial Internet), and the number among the top 20 increased to five. As of June 18th, 2026, the number of tech stocks among the top 10 by market capitalization had surged to five.

In terms of market capitalization growth, all five tech stocks have seen significant increases this year. Inno-Light's market cap has risen by over RMB 840 billion. Foxconn Industrial Internet, Cambricon, and YOFC have each grown by over RMB 300 billion, while CATL's market cap has increased by over RMB 100 billion. On June 18th alone, Foxconn Industrial Internet, Inno-Light, and Cambricon each saw their market caps grow by over RMB 100 billion. Inno-Light's rise has been particularly remarkable. Its closing price on June 18th, 2025, was RMB 125.06. By June 18th, 2026, it had risen to RMB 1,367.88, nearly a tenfold increase in just one year. The company took only 56 days to go from surpassing RMB 1 trillion in market cap for the first time to reaching RMB 1.5 trillion and overtaking Kweichow Moutai.

Four Driving Forces

The reshaping of the market capitalization landscape is the result of multiple converging forces.

At the macro policy level, comprehensive reforms in the capital market have significantly improved the investment and financing ecosystem for high-tech companies. Over the past two years, medium- and long-term funds such as social security and insurance have continuously increased their investments in A-shares. Institutional innovations on the STAR Market and ChiNext have consistently provided "fresh capital" to tech companies.

At the industry trend level, artificial intelligence, as the driving force behind a new round of industrial revolution, exhibits strong momentum and an unprecedentedly broad range of influence. Traditional sectors such as finance and consumption have seen slowed growth and pressure on valuations, while AI computing power and energy storage, as core tracks of new quality productive forces, have received key policy support. The five leading companies—positioned in power batteries and energy storage (CATL), AI server manufacturing (Foxconn Industrial Internet), high-speed optical modules (Inno-Light, YOFC), and domestic AI chips (Cambricon)—are all scarce core assets in the AI supply chain, benefiting from both overseas exports and import substitution logic.

At the performance delivery level, "high-tech" is transitioning from capital market narratives to tangible results. Foxconn Industrial Internet achieved revenue of RMB 251.078 billion in Q1 2026, up 56.52% year-on-year. Net profit attributable to shareholders was RMB 10.595 billion, up 102.55% year-on-year. Inno-Light reported revenue of RMB 19.496 billion in Q1, up 192.12% year-on-year. Net profit attributable to shareholders was RMB 5.735 billion, up 262.28% year-on-year. YOFC reported revenue of RMB 8.338 billion in Q1, up 105.76% year-on-year. Cambricon achieved revenue of RMB 2.885 billion in Q1, up 159.56% year-on-year, with net profit attributable to shareholders of RMB 1.013 billion. The rapid growth in performance provides a solid fundamental foundation for market capitalization expansion.

At the capital behavior level, long-term funds such as publicly offered funds and northbound capital continue to concentrate on leading tech stocks. Statistics show that as of the end of Q1 2026, multiple funds listed Inno-Light among their top ten holdings, collectively holding 230 million shares with a market value of RMB 130.779 billion. Among the top ten holdings of publicly offered funds in Q1 2026, Inno-Light, CATL, and YOFC ranked in the top three. Qualified Foreign Institutional Investors continue to increase their allocations to A-share tech assets, with new constituents added to the MSCI China A Index primarily concentrated in tech sectors such as AI computing power infrastructure, optical communications, and advanced manufacturing.

Shift in Pricing Anchors

Inno-Light's market capitalization surpassing Kweichow Moutai epitomizes the shift in A-share pricing logic. Beyond the "traditional lens" of scale and profit, the market is now adding a "professional lens" that focuses on R&D, barriers to entry, and strategic positioning. As computing power becomes a factor of production and technology moves out of the lab, the capital market is gradually taking high-tech as its pricing anchor.

This represents not just a reshuffling of market capitalization rankings but a deeper transformation in industrial structure. The capital market is using shifts in market capitalization proportions to confirm the core pricing power of new quality productive forces. Over a ten-year span, looking back to 2016, the "top ten by market capitalization" in A-shares were almost entirely dominated by financial stocks. In the past decade, the weight of individual stocks in traditional finance and cyclical sectors has continuously declined, replaced by technological power. Foreign institutions generally believe that structural trends in the A-share market will persist, with a solid tech theme. Against the backdrop of global capital once again seeking certainty assets, foreign investments in A-shares primarily focus on directions such as artificial intelligence, advanced manufacturing, energy security, and materials.

Staying Sober Amid the Feast

While acknowledging historic changes, caution is also warranted.

Valuation bubble risks. The tech sector in the A-share market now accounts for over 30% of total market capitalization, with trading congestion at historically high levels. While this AI-driven tech revolution will produce great companies, the rapid rise has pushed valuations to historically high levels, posing risks of significant corrections. Most stocks in the AI sector currently exhibit valuation bubbles, with short-term market sentiment overheating, making it likely that the sector will undergo a valuation adjustment.

Speculative hype risks. Tech stocks inherently carry a growth halo and high valuation elasticity, but their tech attributes create information barriers, often obscuring true performance. This provides opportunities for some market participants to create stock price bubbles under the guise of tech concepts. On the evening of June 16th, several popular companies, including Eoptolink and Accelink, issued announcements about abnormal stock trading volatility, warning that short-term stock price increases had severely deviated from fundamentals. Cambricon also denied market rumors on the same day of its surge that it was "supplying large quantities to internet companies."

Performance divergence risks. As overall valuations in the capital market's tech sector remain high, the market is shifting from "beta" to "alpha"—only directions with orders, performance delivery, and industrial trend support will continue to attract capital. The iterative risks in the tech industry, uncertainties in technological routes, and variables in global supply chain restructuring are long-term challenges that these trillion-yuan market capitalization newcomers must face.

From Finance Dominance to Tech Ascendancy, the Reshaping of the A-Share Market Capitalization Landscape Has Occurred. This is not only a reflection of China's economic transformation in the capital market but also foreshadows a future where pricing logic will increasingly be written by "high-tech." However, historic breakthroughs do not equate to permanent success. For investors, while embracing the tech theme, it is even more crucial to find a margin of safety between valuations and fundamentals, distinguishing genuine innovation from false concepts. After all, shifts in market capitalization rankings can occur overnight, but a company's value creation must ultimately withstand the test of time.

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Original content by Shengma Finance. Unauthorized reproduction prohibited.