Huaxin Securities·2025-07-28 12:02Investment Rating - The report maintains a "Recommended" rating for the power equipment sector [9]. Core Insights - Google's Q2 2025 financial results exceeded market expectations, with revenue reaching $96.4 billion (up 14% year-on-year) and net profit at $28.2 billion (up 19% year-on-year), driven by strong performance in Google Cloud and AI-driven advertising [5][6]. - The report highlights a significant increase in Google's capital expenditure, raised from $75 billion to $85 billion, a 13.3% increase, primarily for AI server procurement and data center construction [5]. - The AI product penetration rate is surging, with Gemini monthly active users exceeding 450 million and AI search features reaching over 2 billion users, contributing to a search query growth of over 10% [6]. - TSMC reported a record Q2 2025 revenue of NT$933.8 billion (up 39% year-on-year) and a net profit of NT$398.3 billion (up 61% year-on-year), driven by the demand for AI chips [7]. - The WAIC 2025 event in Shanghai showcased over 800 participating companies and is expected to further catalyze the domestic computing power sector [8]. Summary by Sections Financial Performance - Google's Q2 2025 revenue was $96.4 billion, with a net profit of $28.2 billion, surpassing analyst expectations [4]. - TSMC's Q2 2025 revenue reached NT$933.8 billion, with a net profit of NT$398.3 billion, both setting historical highs [7]. Capital Expenditure - Google increased its annual capital expenditure from $75 billion to $85 billion, focusing on AI infrastructure [5]. - TSMC raised its full-year revenue growth guidance to 30% due to surging demand for AI chips [7]. AI and Cloud Services - Google Cloud's annualized revenue surpassed $50 billion, with an operating profit margin of 20.7% [5]. - The AI ecosystem is experiencing robust demand, with significant growth in both cloud services and AI-driven advertising [6]. Investment Recommendations - The report suggests focusing on companies within the AIDC sector, particularly Weichai Heavy Machinery, and highlights opportunities in HVDC and server power supply segments [9].