Industrial Securities has released a research report stating that the domestic computing power chain is currently experiencing catch-up gains relative to the North American computing power chain, indicating that the AI rally is spreading within the computing power supply chain. Hong Kong-listed internet stocks, due to their inherent trading attributes linked to domestic computing power, show a high positive correlation with the former. This suggests that within the AI sector, besides the expansion from North American computing power to domestic computing power, the Hang Seng Tech Index is also a major diffusion trend. Furthermore, from a global comparison perspective, cloud providers represented by Hong Kong internet stocks are expected to be a direction for subsequent catch-up gains in the domestic AI market.

The main views of Industrial Securities are as follows: The firm selected 47 leading North American computing power chain companies (such as optical modules, PCBs) and 41 leading domestic computing power chain companies (such as semiconductor industry chain, storage) from the A-share market to construct "North American Computing Power Chain" and "Domestic Computing Power Chain" indices, respectively, to observe the internal spread of the computing power theme. Recently, the domestic computing power chain has been playing catch-up relative to the North American computing power chain, indicating that the AI rally is diffusing internally within the computing power chain.

By comparing the performance of the North American computing power chain relative to the domestic computing power chain with its performance relative to Hong Kong internet stocks represented by Alibaba, a very high positive correlation was observed. This indicates that, within the AI sector, besides the diffusion from North American computing power to domestic computing power, the Hang Seng Tech Index is another major diffusion trend. The logic behind this is relatively straightforward. On one hand, the capital expenditures and guidance from major Hong Kong internet companies are to the domestic computing power chain what North American Cloud Service Provider (CSP) manufacturers are to the North American computing power chain—a relationship where they thrive together. Therefore, Hong Kong internet stocks inherently possess trading attributes linked to domestic computing power. On the other hand, Hong Kong internet platforms, which possess the best social scenarios and ecosystems, are themselves primary beneficiaries of AI application deployment, thus also carrying trading attributes related to AI applications. Both are important directions for the diffusion of the domestic AI market rally.

Additionally, from a global comparison perspective, cloud providers represented by Hong Kong internet stocks are expected to be a direction for subsequent catch-up gains in the domestic AI market. Since April, stock prices of North American cloud providers have begun to recover, and recent better-than-expected earnings and capital expenditure guidance disclosed by several major CSP manufacturers have further driven significant stock price increases. In contrast, domestic cloud providers have seen relatively lagging gains and are expected to become a direction for domestic catch-up gains influenced by global trends. Several major Hong Kong internet companies will also begin reporting earnings in May. Attention should be paid to their descriptions and guidance regarding AI business and capital expenditures, as these could act as catalysts for the domestic AI supply chain.