Goldman Sachs Sang Duo Chinese AI: There is no bubble in the industry as a whole, power supply chains, hardware infrastructure, and physical AI are worth deploying

The Zhitong Finance App learned that Kinger Lau (Kinger Lau), chief Chinese stock strategy analyst at Goldman Sachs Research, said that there is no bubble in China's artificial intelligence (AI) industry as a whole. Recent market adjustments have brought relevant valuations back to a healthy level, and indicated three sub-industries with key investment opportunities.

In an interview, Liu Jinjin said that the current overall market value of AI-related stocks in China does not fully reflect the potential economic benefits that this technology will bring to a wider range of economic sectors in the future. He acknowledged that the market experienced partial overheating in June — at that time, the valuations of some AI hardware companies on the Science and Technology Innovation Board and GEM reached the highest level in five years. However, the market correction, which continued for a month, restored a “reasonable and healthy” balance between stock prices and expectations for future profit growth.

Liu Jinjin pointed out that at present, Chinese AI companies account for about 11% of the total market value of AI-related stocks in the world, yet the proportion of overseas capital allocated to the Chinese market in their AI investment portfolios is only about 1%. He believes that there are three specific sub-industries in China's AI sector that have the strongest investment prospects, namely power supply chain, hardware infrastructure, and physical AI.

Specifically, the power industry provides long-term structural opportunities because local Chinese equipment manufacturers are continuing to expand their global market share, and China's large-scale, ongoing computing infrastructure construction has further strengthened this trend. At the same time, the hardware infrastructure sector, including printed circuit boards (PCBs), optical modules, and data centers, has high profitability certainty over the next two to three years. Furthermore, the field of embodied AI — covering industrial intelligence and humanoid robots — benefits from China's strong manufacturing ecosystem and has strong global competitiveness.

Liu Jinjin also said that in addition to physical infrastructure, AI software applications in China also have huge potential for growth. Among them, AI Tokens — digital units of measurement representing AI computing services — are expected to become an important new driving force for China's export growth. He pointed out that the cost of a single AI token for large Chinese language models is significantly lower than that of international competitors, and this cost advantage is accelerating the commercialization of AI agents and industry-specific cloud solutions in the Chinese market. He added that this structural cost efficiency advantage may soon redefine China's trade pattern.