CITIC Securities: Accelerating the Commercialization of AI, focusing on the main line of computing power and policy opportunities.

CITIC construction investment announced that as of August 8, 2025, the SW communications equipment sector had risen by 31.4% compared to the beginning of the year, outperforming the overall market. In the first half of this year, the computing power chain remained one of the main investment themes in the market, with trends in domestic and overseas computing power chains alternating. During this period, factors such as the release of DeepSeek R1, tariff parity, and North American AI expectations have had an impact. Since mid-April, the capital expenditure of overseas cloud service giants has exceeded expectations, gradually dispelling the pessimistic narrative of "computing power contraction", and the share prices of core suppliers have reached new highs. Looking ahead to the second half of 2025, as the capabilities of large models continue to strengthen and more diverse application scenarios are expected to boost the continuous surge in AI inference computing power demand, driving the growth of AI hardware demand. We believe the following trends deserve attention: 1) increasing certainty in the growth of domestic and foreign computing power chain demand; 2) the importance of networks in AI-driven data centers expected to increase; 3) the acceleration of the deployment of AI applications such as Agent. In addition, the policy signals of the "15th Five-Year Plan" in digital infrastructure, marine economy, and military communications are worth noting.