Shanxi: The outlook for AI computing power remains optimistic after the first quarter report, and domestic computing power may see stronger growth in the second half of the year.

Shanxi released a research report stating that the outlook for capital expenditure by cloud giants is determined, and core companies such as optical modules and copper connections showed higher growth in the first quarter. Currently, the main factors suppressing overseas chains are mainly at the valuation level, with the releases of GPT5 and DeepSeekR2 thought to bring about a "qualitative breakthrough," and the outlook for investment in computing power in 2026 is unlikely to undergo fundamental adjustments; meanwhile, there is no expectation of marginal deterioration in the tariff policy of the Trump administration, so investing in overseas AI chains currently has a good safety margin. For the AIDC track, as it takes time for newly added production capacity to revenue, the current market is mainly driven by expectations as a leading indicator of production capacity deployment. Due to changes in the H20 sales control policy, domestic computing power will experience a faster import window in the second half of the year, and the domestic computing power industry chain represented by Ascend, Haiguang, Hanwuji, and Muxi is expected to perform well in the future. Domestically, positive signals are frequent in the first-quarter reports of AIDC and upstream Infra, and the domestic computing power may see stronger growth in the second half of the year. Capital expenditure growth will drive orders for HVDC, precision air conditioning, diesel generators, cabinets, MPO optical fiber, etc., leading to optimistic prospects for the performance of the AI Infra track in the mid-year report. With the changes in the sales control policy of H20, domestic computing power will see a faster import window in the second half of the year, and the domestic computing power industry chain represented by Ascend, Haiguang, Hanwuji, and Muxi is expected to perform well. Additionally, super node technology is the most prominent competitive advantage of the Huawei 910C cluster, and OISA led by mobile and ETH-X led by Tencent will lead the domestic AI chip to form a unified super node technology standard, with matching switch chips, copper connections, and optical modules expected to see substantial growth in 2026. The downstream orders for military informationization have significantly recovered, and the investment direction represented by intelligence, low cost, and collaborative operations is promising. It is recommended to focus on the following targets: Optical communication: Zhongji Innolight (300308.SZ), Eoptolink Technology Inc., (300502.SZ), Henan Shijia Photons Technology (688313.SH), Advanced Fiber Resources (300620.SZ), Cig Shanghai (603083.SH), Yuanjie Semiconductor Technology (688498.SH), Huagong Tech (000988.SZ), Accelink Tectechnologies(002281.SZ)Copper Connections: Shenzhen Woer Heat-shrinkable Material (002130.SZ), Dongguan Dingtong Precision Metal Co., Ltd. (688668.SH), Kingsignal Technology (300252.SZ), Sichuan Huafeng Technology (688629.SH), Wenzhou Yihua Connector (002897.SZ). Domestic Computing Power: Cambrian Technology (688256.SH), Hygon Information Technology (688041.SH), Super Telecom (603322.SH), Shengke Communication (688702.SH), Unisplendour Corporation (000938.SZ). Military Information Technology: Chengchang Technology (001270.SZ), Great Microwave Technology (688270.SH), Yangtze Optical Electronic (688143.SH), Bangyan Technology (688132.SH), Chengdu Zhimingda Electronics Co., Ltd. (688636.SH). Risk Warning Overseas computing power demand lower than expected, domestic operators and internet investment lower than expected, intense market competition leading to price declines beyond expectations, upgrade of external sanctions.