Huatai Securities: Within the AI industry, divergence may occur along return verification.

Huatai Securities research report states that within the AI industry, differentiation may occur along the lines of return validation. Over the past two weeks, adjustments in overseas AI assets have intensified, pressure from financing and investment returns continues to transmit, and rising data center regulation following the U.S. midterm elections has further affected expectations for project construction pace. Hardware earnings are still delivering demand growth, while the market's focus on AI investment is falling more on delivery certainty, profit quality, and cash recovery. In terms of allocation, focus on two types of opportunities: first, key infrastructure suppliers whose orders, deliveries, and profits can be cross-validated, including PCB, optical interconnect, and other segments, tracking contract pricing, product mix, and capacity expansion pace to judge profit elasticity; second, application platforms already validated by revenue and cash flow, as well as edge/physical AI and others. In addition, it is recommended to remain cautious on companies that rely on new approvals, continuous external financing, or forward profit assumptions, with allocation basis further shifting to growth quality and capital use efficiency.