Why Are Global Tech Giants All Eyeing AI?
Recently, major U.S. tech giants have successively disclosed their Q3 financial reports. One of the highlights is that several tech giants continue to increase their investment in AI.
Microsoft: Capital expenditure in Q3 increased by 50% year-on-year, reaching 15 billion U.S. dollars, with the significant increase mainly driven by active AI investment and general server restocking.
Google: Capital expenditure in Q3 increased by 62% year-on-year, reaching 13 billion U.S. dollars, and expects a substantial increase in expenditure by 2025, mainly driven by investment in AI infrastructure.
Amazon: It is expected that this year's capital expenditure will reach a record 75 billion U.S. dollars, a 55% increase from last year, with most of the expenditure used to support the demand for technological infrastructure such as cloud business.
The continuous increase in huge investments reflects the fierce competition among U.S. tech giants in the field of AI, which requires a large number of high-end chips and the construction of large-scale data centers.
The huge investment opportunities brought by the AI wave are not only firmly grasped by U.S. tech giants, but also in the A-share market, investment in the AI field is booming and extending to all aspects of the industry chain.
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I. AI Investment Explosion
By the end of 2023, the venture financing amount of Chinese AI startups reached 233.35 billion U.S. dollars, ranking second in the world, but there is still a significant gap compared to the United States, which ranks first. Currently, China is continuously increasing financial investment and policy support in the field of artificial intelligence to narrow the gap.
Taking industrial robots as an example, the equity financing scale of mainland industrial robot companies exploded in the third quarter of this year, reaching 30.012 billion yuan, higher than the sum of 2022 and 2023.
In the upstream computing power end, the explosive growth of AI has an increasing demand for computing power day by day. Giants such as Microsoft, Apple, Amazon, and Google continue to increase their investment in AI computing power. In the AI era, "shovel sellers" who can provide high-end computing power chips, such as Nvidia, once became the world's most valuable company;
At the same time, domestic computing power is also rising rapidly, and leading companies continue to develop computing power chip businesses, which are expected to welcome accelerated resonance in domestic and foreign computing power.
II. The Core of AI is the Chip
There is a popular saying in the investment circle: the end of AI is computing power, and the core of computing power is the chip.
According to statistics, all chip companies listed on the A-share market have seen their R&D expenses rise steadily in recent five years, with a compound annual growth rate of R&D expenditure reaching 21.71%.
In terms of performance, benefiting from the recovery of market demand, acceleration of localization, and empowerment of terminal innovation, the semiconductor industry's performance in 2024Q3 was impressive, with many companies achieving high growth in operating performance.
According to the regular reports of listed companies, in the first three quarters of 2024, the total operating income of companies related to the semiconductor industry was 377.691 billion yuan, a year-on-year increase of +22.84%; the net profit attributable to the parent company was 25.731 billion yuan, a year-on-year increase of +42.58%.
This may indicate that although the results of R&D investment require time to accumulate, the huge potential contained in the transformation of scientific research results has been initially realized and deserves the attention of investors.
III. How to Invest in Technology?
The investment opportunities in the AI field have attracted widespread interest from institutions. In the latest third-quarter report, "Hardcore Li Gong" Li Xin expressed his optimism about the AI and semiconductor fields:
From an investment perspective, we have a large number of high-quality companies in our country that are deeply involved in the global AI industry chain for a long time, such as optical modules, high-speed data communication PCBs, AI servers, etc.; at the same time, China's local AI core industry chain is also developing rapidly, and there are a group of rapidly developing companies worth in-depth research and investment in core segments such as AI computing power chips, switch chips, and optical communication chips.
Semiconductors, as the foundation of the AI industry, from advanced process semiconductor manufacturing to semiconductor equipment, power chips and other segments, are all rapidly developing opportunities in this wave of industrial transformation brought by AI, among which there are many excellent targets worth investing in.
At present, global investment in the AI field is booming, driving a new round of technological waves. For ordinary investors, the technology industry naturally has the attributes of "high growth, high return, high volatility". Although the expected returns are attractive, the high professionalism of the technology industry brings certain research barriers, and the high volatility also makes it difficult to participate, so choosing professional management is a good choice.