Bank of China Securities·2025-05-18 11:09Investment Rating - The industry investment rating is "Outperform" [10] Core Insights - The demand for global computing power is steadily increasing, driven by the long-term growth confidence of North American tech giants in AI computing needs and their strategic intent to consolidate competitive barriers through technological iteration [1][2] - In Q1 2025, the combined capital expenditure (CAPEX) guidance from Microsoft, Google, Amazon, and META exceeds $320 billion, representing a 43% increase compared to 2024, with Q1 CAPEX alone surpassing $70 billion, a year-on-year growth of over 60% [1][2] Summary by Sections North American Tech Giants' CAPEX - Microsoft plans to integrate ChatGPT deeply into its products, with Q1 2025 CAPEX reaching $16.7 billion (+53%) and an annual guidance exceeding $80 billion [2] - Google has achieved over 140 million downloads of its self-developed open-source model Gemma and has a TPU seventh-generation cluster with a computing density of 1 EFLOPS, with Q1 2025 CAPEX at $17.2 billion (+43%) and an annual guidance of $75 billion [2] - META is enhancing its advertising and metaverse business competitiveness through the Llama model and has launched an "AI social server" in collaboration with NVIDIA, with Q1 2025 CAPEX rising to $12.9 billion (+102%) and an annual guidance adjusted to $64-72 billion [2] - Amazon's Q1 2025 CAPEX is $24.2 billion (+74%), with an annual guidance of $100 billion [2] AI Applications and Infrastructure Demand - AI collaborative applications are boosting business and driving up computing power demand, with Microsoft Azure cloud service revenue growing rapidly, Google improving search ad click-through rates and CPM through AI, META upgrading its advertising system leading to ARPU increases, and Amazon reconstructing e-commerce scenarios with generative AI features [3] - The high growth in capital expenditure from North American CSPs is beneficial for the industry chain demand, with recommendations to focus on optical modules (e.g., Huagong Technology, Xinyi Technology, Bochuang Technology) and optical chips (e.g., Shijia Photon, Yuanjie Technology) [3]