CITIC SEC: Nvidia's guidance, Google Gemini 3 exceed expectations. Continues to be optimistic about the AI PCB sector.

CITIC SEC released a research report stating that the recent performance of NVIDIA FY26Q3 and the revenue guidance for FY26Q4 exceeded expectations. Meanwhile, Google released Gemini 3, which greatly improved model performance and exceeded expectations. The underlying essence is that the AI industry is still in an accelerating stage, and there is optimism for the PCB industry as it plays a crucial role in AI chip upgrades. There have been recent catalytic events in the PCB sector, and it is recommended to continue focusing on key manufacturers in the AI PCB sector. Catalytic Event 1: NVIDIA's Performance and Guidance Exceeded Expectations On November 20, NVIDIA released its FY26Q3 financial report, reporting revenue of $57 billion, a year-on-year increase of 62%, exceeding market expectations of $55.2 billion. The adjusted operating profit was $37.8 billion, a 62% increase year-on-year, also surpassing market expectations of $36.5 billion. NVIDIA also guided a revenue of $65 billion for FY26Q4, a 65% year-on-year increase and a 14% quarter-on-quarter increase, exceeding market expectations of $62 billion. The gross profit margin for FY26Q4 was guided at 74.8%, showing an upward trend. The overall performance for FY26Q3 and the revenue guidance for FY26Q4 exceeded expectations. Catalytic Event 2: Google released Gemini 3, which exceeded expectations, indicating that Scaling laws will continue On November 18, Google released the new AI model Gemini 3.0, which outperformed in various professional evaluations. For example, it scored 37.5% in the Humanity's Last Exam (HLE) compared to GPT5.1's 26.5%. In the ScreeSpot-Pro test, it scored 72.7% compared to Claude Sounnet 4.5's 36.2% and GPT5.1's 3.5%. Its abilities in vision, reasoning, programming, and multimodal capabilities have significantly improved. Its practical application usability and applicability have greatly increased, and it has been adopted by important developer platforms such as AI Studio, Gemini CLI, Cursor, GitHub, JetBrains, Cline, and others. Event Interpretation: Continued demand for computing power, continued optimism for the AI PCB industry The demand for Tokens has exceeded expectations, with Google reporting a monthly inference token usage of 1.3 qn in October, more than double from May. Additionally, Gemini 3.0 is trained on Google's self-developed TPU chip, which offers high cost-effectiveness, resulting in higher computing power with the same Capex, leading to higher component expenditure. We continue to have a positive outlook on the high certainty and growth potential of the AI PCB sector. The orthogonal backplane solution is currently undergoing iteration/validation processes, and feedback results are expected in 1-2 months. Additionally, NVIDIA's Rubin chip has been taped out, and its PCB solution is gradually becoming clearer in terms of materials and selection, which is expected to provide catalysts for the AI PCB sector recovery and growth. Investment Strategy: CITIC SEC consistently believes in the opportunities in the PCB industry as the crucial sector for upgrading AI chips. This reflects the rapid growth in structural demand for high-end HDI and high-speed PCBs driven by AI chips and high-speed networks. The industry's competitive landscape and supply/demand balance are expected to remain positive in the short to medium term, with leading manufacturers continuing to show strong performance growth. There is still room for further valuation improvement in the industry as a whole. We continue to be optimistic about the future growth potential of the AI PCB sector. It is recommended to focus on: 1) Leading manufacturers with advanced technological capabilities, customer positioning, and high certainty in performance. 2) Manufacturers with outstanding marginal changes, active expansion of production capacity, and continuous strengthening of AI business expectations. 3) Beneficiaries of the profit improvement from the upward cycle of copper foil prices and the volume increase of high-end materials in the copper foil industry.