With the explosion of artificial intelligence, how should the chip industry invest?

From January 1 to September 14, 2023, the Nasdaq index of U.S. stocks rose by nearly 30%. This increase was mainly driven by seven giant companies: Apple, Microsoft, Google, Amazon, Tesla, Meta, and Nvidia. Each of these companies performed better than the Nasdaq, with Nvidia's increase more than doubled.
The common feature of these companies is that each company's business is more or less related to artificial intelligence (AI). For example, Apple's smart head display (Vision Pro) needs to apply AI technology, OpenAI, in which Microsoft holds a stake, is the engine of this wave of AI, and Nvidia is a supplier of AI computing chips.
At the beginning of 2023, after ChatGPT became popular, Nvidia boss Huang Renxun declared loudly: AI's iPhone moment has arrived.
More than ten years ago, the birth of the Apple mobile phone was a key moment in the development history of the super-large industry of mobile Internet. So is the emergence of ChatGPT really AI's iPhone moment? There may be no definite answer to this question at present, but judging from the stock price trends of AI-related companies, the market may believe this for the time being.
From the perspective of overall development, the chip industry is an industry with a very large market space and a high average growth rate.
From the perspective of industry classification and industrial chain, chips can be divided into eight types in terms of application, among which logic chips represented by GPU and CPU account for the largest share, while the GPU segment has a higher expected growth rate. The industrial chain of the chip industry mainly includes design, manufacturing and packaging testing, and there are also many auxiliary links, and many listed companies have been born.
From the perspective of industry characteristics, the chip industry, especially the GPU industry, has both high growth and high cyclical fluctuations. The main reason for its cyclical fluctuations is the mismatch between demand and capacity supply.
From the perspective of investment logic, for the cyclicality of the chip industry, the core of the investment strategy is to judge the cyclical position. We can track and judge through the indicator of inventory turnover rate and combine it with the time period. For the growth of the chip industry, we can maintain a long-term focus.