Intelligent finance APP has learned that China International Capital Corporation released a research report stating that in the first half of 2024, AI computing power is still the core investment theme, with AI large model iteration optimization and high prosperity of North American cloud vendors' AI investment driving the performance and market performance of AI hardware core suppliers upward, leading to the sector's market cap rebounding from the beginning of the year. Looking ahead to the second half of 2024, it is recommended to focus on the five major opportunities in the communications equipment industry: domestic computing power is accelerating, driving long-term empowerment of new productive forces in the AI industry; large AI models are evolving towards multimodal directions, while focusing on engineering optimization and long-term reasoning implementation, driving high prosperity of overseas cloud hardware demand; operator capital expenditures are flat, focusing on structural opportunities such as 5G-A and backbone network upgrades; domestic satellite construction is accelerating; and enterprises going overseas lead new growth.

Domestic computing power has rich marginal changes, and the mid-to-long-term upgrade of domestic AI technology strength is expected to deeply empower new quality productivity. From Wenxin Yiyu, Kimi, to DeepSeek-V2, the number of domestic large models is accelerating growth, evolving towards large parameters, long text, and multimodal. On the infrastructure side, the policy actively promotes the construction of domestic smart computing centers, while the uncertainty of the global supply chain further boosts the demand space for domestic computing power. China International Capital Corporation believes that with the continuous upgrading of domestic GPU computing power and the improvement of the ecosystem construction, the development space of domestic computing power is vast. It is recommended to focus on AI servers, data center switches and chips, domestic optical modules and other directions. In the long run, the evolution of AI can achieve industrial cost reduction and efficiency improvement, better empower the industry's digital transformation, promote the development of new quality productivity, and jointly provide solutions for enterprise digital transformation solution providers, as well as IoT module companies that act as key components for data entry into the network, are expected to usher in development.

Overseas AI hardware demand continues to be prosperous, and low power consumption demands lead technological innovation. Looking at the overall AI industry, innovation in large models is moving forward in both exploring Scaling Law and engineering optimization, and multidimensional pursuits are driving cloud hardware demand upward. Meanwhile, China International Capital Corporation has noticed the trend of accelerated iteration of cloud networks. Against this background, on the one hand, the industry's replacement is accelerating, and it is beneficial for existing leading suppliers to take advantage of their early development; on the other hand, low power consumption demands are becoming increasingly urgent, and solutions such as liquid-cooled servers, silicon and LPO optical modules may accelerate landing, traction structural investment opportunities.

Risk

Investment in information infrastructure is lower than expected; the uncertainty of the development of new technologies such as AI; trade and technology frictions.