Nomura: China's cloud computing is experiencing irreversible development, AI will become a key driving force.

Nomura's research report indicates that as the workload of on-premise IT continues to shift to the cloud, the cloud computing market is experiencing an irreversible trend of development, with artificial intelligence also becoming a key driver of growth re-acceleration. Preferred investment targets are Alibaba, Tencent Cloud, and the relatively undervalued Kingsoft Cloud. The report states that in the past few years, cloud computing has become an indispensable part of the global IT infrastructure, and Nomura believes that it still has huge growth opportunities in the future. According to Gartner's data, in 2024, the global enterprise cloud computing market will only account for 18% of total enterprise IT spending, but this proportion is expected to increase to 27% by 2028. The bank believes that the development of large language models and generative AI is still in the early stages, and will play a crucial role in accelerating the growth of global and Chinese cloud service providers in the future. It also believes that Chinese cloud service providers should focus on expanding high-value business areas to improve profitability.