[Market Countdown] U.S. Treasury Yields Hit 19-Year High! 99% of Retail Investors May Make This Critical Mistake!

"U.S. Treasury yields surging," "30-year U.S. Treasuries at a nearly 20-year high"—many people are asking Jiang Jiang: "Is a financial crisis coming? Has the AI bubble burst? Should I sell everything now?" Let’s state the conclusion first: There will be no major stock market crash! Never sell off your quality holdings at depressed prices!

Why? Yes, long-term interest rates have indeed raised alarms, but recent market developments reveal a crucial insight: when long-term rates rise too sharply, even the U.S. government starts to take action. If interest rates spiral out of control, not only stocks suffer—but also mortgages, corporate financing, U.S. government interest expenses, and even the entire financial system.

Therefore, the U.S. government cannot afford to let long-end rates run wild. It's like a speeding truck—you can't keep turning the steering wheel fully to the right forever. When markets fall into excessive panic, policy and capital flows often begin to correct themselves.

Imagine the U.S. government as an ultra-wealthy individual with an 'unlimited credit card.' Although their monthly interest payments are terrifyingly high, what they value most—and must never lose—is their 'creditworthiness' and their status as the leader of a 'bull market.' To maintain this supremacy, the U.S. Treasury and the Federal Reserve will undoubtedly deploy every tool in their arsenal to protect the system.

This time, the U.S. has already set up two 'secret pipelines' to drive down both short- and long-end interest rates:

1. The 'Stablecoin Effect' on Short-Term Rates: Have you noticed Bitcoin surged 24% in a single week recently? This isn’t just speculation—it carries significant implications. When Bitcoin rises sharply, dollar-pegged stablecoins used as transaction mediums (like USDT, USDC) expand rapidly in scale. These issuers, to ensure asset safety, must purchase large amounts of 'U.S. short-term Treasuries.' This massive new demand directly pushes up short-term bond prices, thereby lowering short-term Treasury yields!

2. The 'Treasury Buyback Program' for Long-Term Rates: On another front, the U.S. Treasury has officially launched a 'buyback program' for long-term U.S. Treasuries. When the Treasury itself steps in as a buyer and aggressively repurchases long-dated bonds, pressure on long-end yields naturally eases.

Imagine this one-two punch: once the risk-free rate drops from 5% to 4%, or even 3.5%, the magical 'discount effect' kicks in! Stocks are risk assets, and long-duration assets like AI and tech stocks derive value from expectations of extremely high future profits. When discount rates fall, the present value of those future cash flows increases geometrically, directly boosting P/E valuations!

Moreover, lower interest rates ease financial conditions and reduce corporate financing and operating costs. Think about it: building data centers, purchasing GPUs, servers, power, and cooling systems—all require massive capital. Lower financing costs relieve the financial burden on companies deploying AI, naturally improving profitability! Thus, short-term volatility is far from doom—it's actually a golden opportunity for AI and tech stocks to undergo 'repricing'!

So instead of panicking with the market, you should now ask: if rate fears gradually subside, where will the next wave of high-growth stocks emerge? My answer remains three characters: 'CPO'.

NVIDIA recently announced that its Spectrum-X Ethernet switches, built on CPO technology, have entered full-scale mass production, ringing in the era of 'silicon photonics.' According to institutional research, NVIDIA and major manufacturers’ CPO shipments are expected to shine brightly by 2028. Its industry-leading chip design and CUDA software ecosystem form an impenetrable moat.

If GPUs are the 'brains' of AI, then CPO and silicon photonics are the 'nervous system' of future AI. And within this supply chain, Taiwan happens to host a group of companies occupying critically important positions.

United Microelectronics (3081-TW)

United Microelectronics’ core strength lies in indium phosphide (InP) epitaxy and high-speed laser components. As demand for 800G, 1.6T, and external light sources for silicon photonics grows, the value of upstream key materials rises accordingly. With ongoing market attention on InP supply and high-speed transmission needs, United Microelectronics stands as a prime beneficiary of advancing speed specifications.

Win Semiconductors (4979-TW)

Win Semiconductors has established a strong position in high-speed optical communication modules and related components, directly benefiting from AI data center transmission upgrades. As the market advances from 800G to 1.6T, a higher mix of premium products will improve operational leverage. Its moat lies in long-standing expertise in optical communications and customer validation capabilities. If high-speed product volumes continue to ramp up, profit elasticity deserves close tracking.

Poemtek (3163-TW)

First-half profits grew significantly year-on-year, with fundamentals already reflecting rising demand for high-speed optical communications. Its strengths lie in passive optical components and fiber array manufacturing processes, playing a high-precision connectivity role within CPO architectures. If FAU demand continues to grow, revenue and profit growth have room to extend.

Suncom Technology (3363-TW)

Suncom is still in an investment and transition phase, reporting losses in the first half—so it shouldn’t be evaluated solely on short-term EPS. However, July revenues returned to year-on-year growth, with high-end jumpers and CPO-related products beginning shipment. Market expectations suggest that rising FAU shipment volumes could improve its operational structure. It’s a 'first-mover, wait-for-volume' type of investment.

Fancentek (6830-TW)

Fancentek isn’t a pure optical communications firm but focuses on inspection and failure analysis for AI, advanced processes, and silicon photonics. Its value lies in the fact that as high-end chips and silicon photonics become more complex, verification and failure analysis grow increasingly critical. If AI chip and silicon photonics R&D continues to expand, testing services could scale up significantly—making it a hidden gem in the CPO trend, akin to 'selling shovels during a gold rush.'

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Source: Moore Investment Advisory – Analyst Jason Chiang

The securities recommended by our company involve no improper financial interests. Past performance does not guarantee future profits. Investors should make independent judgments, conduct careful evaluations, and assume investment risks on their own.