The Bull Market Enters Its Third Phase: Computing Power Shift to Applications

According to recent analysis from Guosen Securities Chief Economist Xun Yugeng, the current bull market cycle that commenced on September 24, 2024, is poised to evolve significantly through 2026. The bull market framework remains supported by continued accommodative policy measures and persistent deflationary pressures similar to the market environment of May 19, 1999. Market indicators suggest this bull market has not yet reached its temporal or cyclical limits, with investor sentiment still below peak levels—indicating substantial room for advancement.

Policy Support Maintains Bull Market Momentum

The economic backdrop for 2026 remains largely consistent with 2025: policy accommodation continues to be the dominant force supporting market valuations. This sustained easing environment mirrors historical precedents and creates favorable conditions for extended bull market participation. Unlike sentiment-driven rallies, this structural support suggests the bull market cycle possesses deeper staying power than typical cyclical advances.

Fundamentals Expansion Broadens Market Participation

A critical shift is emerging as economic fundamentals recovery spreads beyond concentrated pockets to encompass the broader market. With household capital increasingly flowing into equity markets, the bull market is transitioning from its second phase characteristics into third-phase dynamics. This phase expansion means sectors and asset classes previously overlooked are beginning to attract institutional and retail investor attention, fundamentally altering market composition and leadership.

Technology Rally Pivots from Infrastructure to Applications

The technology sector’s evolution within this bull market cycle represents perhaps the most significant strategic pivot. Rather than remaining focused on computing power infrastructure and foundational AI frameworks, technological gains are expected to shift toward application-layer innovations and user-facing solutions. This transition suggests that while infrastructure investments may consolidate, emerging technology applications across various industries should attract fresh capital and investor enthusiasm.

Traditional Assets Face Revaluation Opportunities

Beyond technology, traditional sectors previously challenged in the current environment—including consumer discretionary stocks, beverages, and real estate—may experience reassessment and revaluation. These areas, having underperformed during the bull market’s infrastructure-heavy phase, could become re-engagement opportunities as fundamental recovery broadens and investor positioning diversifies. The bull market’s maturation typically brings such sectoral rotation dynamics.

The overarching message: this bull market cycle possesses both temporal and spatial runway remaining, with the transition toward its third phase likely to reshape portfolio construction and capital allocation strategies.