China Galaxy Securities: The commercial turning point of AI application has arrived, domestic computing power and applications resonate as the dual main lines.

China Galaxy Securities released a research report stating that with the intensive catalysis of AI application ends, the attention on AI applications has significantly increased. Traditional SEO (Search Engine Optimization) is gradually moving towards GEO (Generative Engine Optimization) to drive the AI commercialization process, which is expected to promote the transition of applications from the technological verification phase to the commercial value realization phase. The commercialization logic of AI applications is expected to first surge in B-end applications, with GEO leading the market trend in AI applications by competing for control over traffic in the AI era, thereby increasing the commercial value of GEO. At the same time, the cost reduction and efficiency enhancement effects of AI models in enterprise internal applications are gradually beginning to show, so it is recommended to focus on the outbreak of AI applications in B-end applications. Key points from China Galaxy Securities: Intensive catalysis for AI application ends, GEO reshaping the traffic logic in the AI era Top Hong Kong models MiniMax and KNOWLEDGE ATLASAI have performed strongly after listing; NVIDIA Corporation and pharmaceutical giant GlaxoSmithKline have announced a collaboration of up to $1 billion in the next five years, establishing a laboratory aimed at advancing the development of AI-assisted drug discovery basic models; OpenAI launches ChatGPT Health and announces the acquisition of medical healthcare startup Torch. China Galaxy Securities believes that with the intensive catalysis of AI application ends, the attention on AI applications has significantly increased, with traditional SEO gradually moving towards GEO to drive the AI commercialization process, potentially pushing applications from the technological verification phase to the commercial value realization phase. B-end AI applications are expected to first surge, while C-end AI applications focus on long-term value targets China Galaxy Securities believes that the commercialization logic of AI applications is expected to first surge in B-end applications, with GEO leading the market trend in AI applications by competing for control over traffic in the AI era, thereby increasing the commercial value of GEO. Additionally, the cost reduction and efficiency enhancement effects of AI models in enterprise internal applications are gradually beginning to show, so it is recommended to focus on the outbreak of AI applications in B-end applications, such as AI+ marketing, AI+ industrial software, AI+ healthcare, AI+ finance, etc.; in addition, traditional high-quality C-end product application companies possess user base and brand influence, and by empowering products with AI, they are expected to further consolidate their barriers, so it is recommended to focus on C-end applications with long-term investment value. Data center demand release + intensive bidding, domestic computing power expected to usher in a new cycle The domestic AI data center bidding began to rebound in the fourth quarter of 2025 and showed an upward trend, while in 2026, domestic Internet giants will accelerate the layout of data centers, with the pace potentially faster than in 2025. If accompanied by the recovery of H200 supply, it will boost the efficiency of large model training, further accelerating the landing of AI applications and the demand for domestic computing power chips in the inference end, which is expected to usher in a new round of cycle for domestic computing power. Key targets that are recommended to focus on: 1) Large models and Maas manufacturers: BABA-W (09988), KNOWLEDGE ATLAS (02513), MINIMAX-WP (00100), Iflytek Co., Ltd. (002230.SZ), SENSETIME-W (00200), TRS Information Technology (300229.SZ), Kunlun Tech (300418.SZ); 2) Domestic computing power and data center industry chain: Cambricon (688256.SH), Hygon Information Technology (688041.US), Loongson Technology Corporation (688047.SH), Range Intelligent Computing Technology Group (300442.SZ), Dawei Technology (Guangdong) Group (600589.SH), Beijing Sinnet Technology (300383.SZ), Shanghai Baosight Software (600845.SH), iSoftStone Information Technology (301236.SZ), Inspur Electronic Information Industry (000977.SZ), Digital China Group (000034.SZ), Shenzhen Envicool Technology (002837.SZ), Shenzhen Kstar Science & Technology (002518.SZ), Hangzhou Zhonhen Electric (002364.SZ). 3) AI+ marketing: BlueFocus Intelligent Communications Group (300058.SZ), Hangzhou Onechance Tech Corp. (300792.SZ), Visual China Group (000681.SZ), MOBVISTA (01860). 4) AI+ industrial software: Digiwin Co., Ltd. (300170.SZ), Nancal Technology (603859.SH), Zhejiang Supcon Technology Co., Ltd. (688777.SH), Empyrean Technology (301269.SZ), Semitronix Corporation (301095.SZ), Primarius Technologies (688206.SH). 5) AI+ healthcare: XTALPI (02228), INSILICO (03696), Goodwill E-Health Info (688246.SH), Winning Health Technology Group (300253.SZ). 6) AI+ office: Intsig Information (688615.SH), Beijing Kingsoft Office Software, Inc (688111.SH), Wondershare Technology Group (300624.SZ), Fujian Fuxin Software Development Joint Stock (688095.SH). 7) AI+ ERP: KINGDEE INT'L (00268), Yonyou Network Technology (600588.SH); 8) AI+ finance: Hundsun Technologies Inc. (600570.SH), Hithink RoyalFlush Information Network (300033.SZ), Beijing Compass Technology Development (300803.SZ), Shenzhen Fortune Trend Technology (688318.SH). Risk alerts: Risks of AI application iteration falling short of expectations; intensified industry competition risks; legal supervision risks; supply chain risks; risks of downstream demand falling short of expectations.