East Money Information Securities: The prosperity of the domestic computing power chain is expected to improve, and AI hard technology remains the core investment theme.

East Money Information Securities released a research report stating that looking ahead to 2026, with domestic and foreign cloud vendors further increasing capital expenditures, the North American computing power sector will continue to grow rapidly. The prosperity of domestic computing power chains is expected to improve, and the development of applications may accelerate the expansion of the AI industry chain on the terminal side. The bank believes that AI hard technology is still the core investment theme, and is optimistic about high dividend-operating assets. It recommends focusing on light modules, copper interconnection, switches, temperature control equipment, power support, IDC data centers, terminal AI, Siasun Robot & Automation direction, and related targets of operators. The main points of East Money Information Securities are as follows: North American Computing Power The investment return is emerging, open interconnection and power deflation lay the foundation for the development of digital communication. The demand-driven AI commercialization in North America is forming a closed loop, validating the rationality of computing power investments; the bank predicts that the capital expenditures of North American cloud vendors in 2026 may exceed 600 billion US dollars. The bank expects computing power investments and infrastructure construction to continue to be prosperous: 1) Scale-up provides incremental market space, optical interconnection continues to penetrate, and the open and standardized interconnection ecosystem inside the cabinet is taking shape, with Ethernet switching systems coming out on top; 2) The end of computing power is power. With the background of the rise in power of single cards/single cabinets in North America, power supply guarantee becomes the decisive factor for cloud computing capacity supply. Full liquid cooling solutions and 800VDC/SST will bring market opportunities with technological changes. Domestic Computing Power Models continue to iterate, and computing power infrastructure has great flexibility. Since the beginning of this year, domestic models have been flourishing, constantly upgrading and iterating. The leading cloud vendors have continued to increase their investments in the AI field, while operators have also continued to increase their capital expenditures in the computing power field, driving the construction of domestic AIDCs. Since 2025, affected by factors such as the ban on the sale of NVIDIA computing chips, domestic AI infrastructure has been slightly lower than expected. With the rapid breakthrough of domestic computing power chips, it is expected that the domestic AI infrastructure will grow rapidly in 2026. The bank believes that: 1) High demand on the IDC demand side + slowing down and improving quality on the supply side may drive the IDC industry into a turning point in the cycle, with long-term investment value; 2) the increase in model parameters and the continuous growth in inference-side demand continue to drive the acceleration of AIDC construction, network architecture, and computing power chips upgrade bring structural alpha opportunities to the industry chain, and links such as light modules, liquid cooling systems, switches, power supplies, etc. are expected to benefit. Terminal AI The industrial chain is thriving, and 2026 expects a surge in terminal shipments. At the current stage, policy-driven and industry chain soft and hard collaboration are pushing terminal AI towards the eve of mass landing with multiple resonance points. The "Opinions on Deepening the Implementation of the" AI + "Action" clearly propose that by 2027, the penetration rate of the new generation of intelligent terminals and intelligent bodies will exceed 70%, and by 2030, it will exceed 90%. The upstream links such as models, chips, and modules are becoming more mature, the participants in the terminal links continue to increase, and product innovation represented by MetaAI glasses is expected to accelerate the market expansion of terminal AI. Looking ahead to 2026, the bank believes that "policy guidance + ecological improvement + demand prosperity" is expected to build a solid beta foundation for terminal AI, and the industry may gradually transition from theme catalysis to performance realization stage, the emergence of popular products on the terminal side may accelerate the sector into a new round of uptrend. Operators Maintaining a steady tone, dividend ratio continues to rise. Operators are in a stage of triple resonance with declining capital expenditures, business structure transformation, and rising dividend yield. The sector has high barriers to entry, low valuation, and high dividend attributes. In the medium and short term, mature basic telecommunications businesses will continue to serve as their revenue ballast. Fine cost control and internal empowerment of AI will help profit growth. The contraction of capital expenditures or significantly increase their cash flow thickness. Emerging businesses are expected to gradually open up their second growth curve. At the current stage, the operators' performance is stable, with profit growth rates higher than revenue growth rates, and the continuously rising dividend ratio maintains relatively stable or even upward, highlighting their value in a low-interest rate environment, and the valuation level is expected to continue to improve.