CITIC Securities said that it continues to be optimistic about the upward trend of procyclical attributes superimposed on AI in the Internet sector. The giants have both offense and defense in the AI trend: if AI technology exceeds expectations, it is likely that Internet giants and partners will generate it; if the AI bubble bursts in a pessimistic scenario, a solid balance sheet and cash flow can be used as a safe haven. In terms of stock selection, the current model capability gap has not brought about true fundamental differentiation. The dominant factor in stock price fluctuations is more AI narratives, and narratives are likely to change at any time. Therefore, before real disruptive innovation appears, we recommend reverse thinking and depreciation allocations.

CITIC Securities said that it continues to be optimistic about the upward trend of procyclical attributes superimposed on AI in the Internet sector. The giants have both offense and defense in the AI trend: if AI technology exceeds expectations, it is likely that Internet giants and partners will generate it; if the AI bubble bursts in a pessimistic scenario, a solid balance sheet and cash flow can be used as a safe haven. In terms of stock selection, the current model capability gap has not brought about true fundamental differentiation. The dominant factor in stock price fluctuations is more AI narratives, and narratives are likely to change at any time. Therefore, before real disruptive innovation appears, we recommend reverse thinking and depreciation allocations.