CITIC Securities: Optimistic about the cyclical nature of the Internet sector combined with the upward trend of AI, giants in the AI trend are both offensive and defensive.

CITIC Securities stated that it continues to be optimistic about the upward trend of the internet sector with the cyclical attribute combined with AI. Giants in the AI trend are both on the offensive and defensive sides: if AI technology exceeds expectations, it is highly likely to be generated by internet giants and their partners; if the pessimistic scenario of an AI bubble bursting occurs, solid balance sheets and cash flow can serve as a safe haven. In terms of stock selection, the current difference in model capabilities has not yet led to real differentiation in fundamentals. The main factor driving stock price fluctuations is AI narratives, which are subject to change at any time. Therefore, before truly disruptive innovation appears, we recommend a contrarian mindset and buying on dips.