China Galaxy Securities: The value of AI applications continues to be realized, and domestic supernodes are expected to reach an inflection point in volume

The Zhitong Finance App learned that China Galaxy Securities released a research report saying that as it enters the interim report disclosure window, the AI sector's internal segmentation circuit experienced serious differentiation in August, and some internal computing power hardware began to switch levels, and even some gradually switched to the AI application segmentation circuit. Currently, it is more in the inventory game stage, and it is necessary to further observe the status of individual stock orders, performance, cash flow, etc. in the AI sector, or it may enter the stage of deception.

The main views of China Galaxy Securities are as follows:

The artificial intelligence sector fluctuated slightly and rose slightly in August, and internal segmentation of racetracks was severe. The Artificial Intelligence Sector Index (884201.WI) rose and fell by 3.03% in August. The Shanghai Composite Index rose and fell 4.02%, the Shanghai and Shenzhen 300 rose and fell 0.8%, the GEM Index rose and fell 2.83%, and the Science and Technology Innovation 50 Index rose and fell 2.96% during the same period. The bank believes that as it enters the disclosure window of the interim report, the AI sector's internal segmentation circuit was severely divided in August, and some internal computing power hardware began to switch levels, and even gradually switched to the AI application segmentation circuit. Currently, it is more in the inventory game stage. Further observation of individual stock orders, performance, cash flow, etc. in the AI sector is needed, or it may enter the stage of deceiving the truth.

The first national special policy focusing on artificial intelligence service providers was introduced, and AI applications are expected to usher in an inflection point in value revaluation. On August 31, the Ministry of Industry and Information Technology issued the “Notice on Launching a Special Action to Cultivate Artificial Intelligence Application Service Providers”. The policy mentions 1) establishing a service provider resource pool: the goal is to exceed 2,000 service providers nationwide by the end of 2026, and no less than 3,000 by the end of 2027 to form a multi-level echelon; 2) improving supply levels: organizing service providers to take the lead in forming “artificial intelligence application service groups” of types such as modulus resonance and computational collaboration to create integrated solutions with upstream and downstream units. 3) Promote large-scale applications: explore the procurement of large models, agents, tokens, etc. through models such as first purchase and first use, risk compensation, etc.; 4) Strengthen service provider support and guarantee: support service providers to strengthen connections with national computing power network hubs, national computing power interconnection nodes, China computing power platforms, etc., and make good use of policy tools such as “computing power vouchers” to reduce computing power costs, and encourage service providers to set up front-line deployment engineer (FDE) teams to take root in user sites and ensure the implementation of scenarios. The bank believes that this is the first national-level special policy in China with artificial intelligence application service providers as the main focus. This policy indicates that the industry's focus is shifting from model competition to implementation and delivery, focusing on filling up large models and the service layer in the middle of the industry to open up the last mile of AI applications. The AI application side is expected to usher in an inflection point in value revaluation.

Domestic supernodes are moving from proof of concept to the system delivery stage, focusing on investment opportunities in the industrial chain. At WAIC2026, the Huawei Atlas 950 Super PoD was exhibited for the first time. The product uses 64 cards in a single cabinet, and the architecture can be expanded up to 8,192 NPUs; in addition, Ali, Zhongke Shuguang, Xinhua 3, Baidu, ZTE, and Mu Xi all launched their own supernode products. The bank believes that Internet vendors have gradually moved from the product verification stage to the batch procurement stage, and are still the main demand side for domestic supernodes. The bank expects accelerated delivery of domestic supernodes in the second half of the year, and upstream industries such as chips, servers, power supplies, liquid cooling, and connectors are expected to continue to benefit.

Nvidia's performance guidance exceeded expectations, and demand for AI infrastructure continued to grow strongly. After trading on the 26th EST, Nvidia announced the results for the second fiscal quarter of FY2027, achieving revenue of US$96.221 billion, up 18% year on year, and net profit of US$59.69 billion, up 126% year on year, up 2% month on month. In addition, Nvidia gave guidance on revenue growth of about 70% for fiscal year 2028. If the supply chain and production capacity are not limited, growth is expected to be faster; the bank believes that the global AI industry is still in an upward boom cycle, showing strong downstream demand and CSPEx It is expected to continue to rise. Upstream supply chains such as fabs, optical modules, storage, PCBs, semiconductor equipment, liquid cooling, power supplies, etc. are expected to benefit first. Midstream computing power leasing and cloud vendors will benefit in the short term in an environment where computing power is in short supply, and AI applications, agents, and enterprise AI applications are expected to benefit in the long term.

Risk warning: Technology iteration falls short of expectations; competition from tech giants increases risk; legal and regulatory risk; supply chain risk; risk of downstream demand falling short of expectations.