Jinwu Financial News | CMB International released its 2025 outlook for the software & IT service industry. Against the backdrop of economic cycle misalignment, the overall stock price performance of the Chinese and US software sectors showed a divergent trend in 2024, but AI-related investment volume, short-term impact on profits, and potential monetization prospects are common concerns of both markets. Looking ahead to 2025, the bank believes that AI-related investment themes will continue from a fundamental perspective, from chips to public clouds to infrastructure software to application software. The infrastructure cloud sector focuses on the upward trend of cloud business growth as supply restrictions gradually ease and the impact of AI-related investments on profit margins, infrastructure software focuses on the rate at which AI-related revenue starts, and application software focuses on the increase in AI-related application subscription revenue. The gradual prosperity of the AI application ecosystem, supported by continuous optimization of large model usage costs, may be the main investment line for the software sector in the next few years.
The bank mentioned that looking ahead to 2025, the continued rise of GPU clouds and steady growth in public cloud demand are still expected to support the steady growth of the cloud industry in China and the US. The bank predicts that the revenue of Chinese infrastructure cloud vendors (Alibaba Cloud/Baidu Cloud/Tencent Cloud) is expected to increase 12% year on year, and the revenue of US infrastructure cloud vendors (AWS/Google Cloud/Microsoft Smart Cloud) will increase 21% year on year, and remain basically stable compared to the growth rate in 2024. Furthermore, the market is gradually shifting from focusing only on the revenue contribution of AI-related clouds to focusing on revenue and profit growth at the same time, showing more concerns about rapid capex expansion and potential drag on profit margins. This trend may continue in 2025.
In terms of the application of large models, fields such as AI clouds, agents, AI programming, and optimization of advertising effects driven by AI are currently the main ways to monetize large models. Looking ahead to 2025, with model iteration and further coverage of AI application scenarios, the bank is optimistic that AI applications will further contribute revenue growth to SaaS vendors.
