Haitong Securities International·2025-04-04 08:09Investment Rating - The report suggests a positive outlook for the aerospace and defense sectors, highlighting potential investment opportunities in companies like Howmet Aerospace, Loar Holdings, and Raytheon Technologies [6][7]. Core Insights - The AI data center sector is experiencing significant investment, with major companies like Microsoft and Meta planning to invest over $345 billion in AI infrastructure by 2025, indicating a potential bubble in the market [2][23]. - The aerospace industry is showing signs of recovery, with Airbus delivering approximately 70 aircraft in March, reflecting an 11% year-on-year increase [28]. - The defense sector is witnessing substantial contracts, such as Lockheed Martin receiving a $4.94 billion contract for precision strike missiles, indicating strong government spending in defense [34]. Summary by Sections Global Market Review - The U.S. stock market has shown a cautious sentiment, with the S&P 500 index declining over 1% recently, reflecting a risk-off attitude among investors [13]. Infrastructure - The AI data center sector is facing risks of overheating, with significant investments planned by major tech companies [23]. - The PJM Interconnection has released a reliability resource plan to ensure new nuclear and gas plants can connect to the grid efficiently [25]. - Poland faces a potential power gap by 2030 if it does not delay the closure of its coal plants, highlighting the challenges in energy transition [26]. Industrial Equipment - The price index for electric motors and generators in the U.S. has shown a year-on-year increase of 26% as of January 2025, indicating strong demand in the industrial sector [20]. - China's transformer exports saw a significant increase of 48% year-on-year in early 2025, reflecting robust international demand [55]. Energy - U.S. electricity prices have decreased by 35.5% recently, while the market for natural gas is showing mixed signals with spot prices declining [5]. - The report notes that the U.S. is expected to see a compound annual growth rate of 18% in gas turbine demand driven by data center needs [54]. Aerospace - The aircraft engine price index remained stable in February 2025, with a year-on-year increase of 6.2%, indicating steady demand in the aerospace sector [30]. Defense - The U.S. government defense spending price index showed a year-on-year increase of 2.1% in Q4 2024, reflecting ongoing investment in defense capabilities [35].