Zhao Yin Guo Ji·2025-12-09 02:33Investment Rating - The report maintains a "Buy" rating for Microsoft (MSFT US), Google (GOOG US), Amazon (AMZN US), and Palo Alto Networks (PANW US) [22][23]. Core Insights - The competition in the large model industry is expected to intensify, with AI applications continuing to monetize effectively. The report highlights the potential for revenue growth driven by enhanced capabilities in AI models, particularly in image editing and video generation [1][25]. - Cloud service providers are experiencing accelerated revenue growth, with capital expenditures increasing significantly, indicating strong demand and a healthy outlook for profitability [3][9]. - AI monetization is driving growth in core business areas while exploring new revenue opportunities, with a focus on cost reduction and efficiency improvements [3][22]. Summary by Sections Industry Outlook - The large model industry is witnessing intensified competition, with continuous improvements in model capabilities and decreasing costs for model invocation. Key trends include a focus on agentic capabilities, faster iteration of open-source models, and the feasibility of large-scale deployment of end-to-end voice interaction models [3][25]. Cloud Business Performance - Revenue growth for U.S. internet companies' cloud businesses has accelerated, with a year-on-year increase in capital expenditures reaching $93.1 billion (+71% YoY). Operating profit for cloud businesses grew by 24.1% YoY in Q3 2025 [3][9]. AI Monetization - AI is driving growth beyond traditional cloud and advertising sectors, creating new revenue opportunities and enhancing operational efficiency. The report notes that enterprise AI applications are commercializing more slowly than AI cloud and advertising but still show promise for profit margin improvements [3][22]. Investment Opportunities - The report suggests focusing on two main scenarios for AI monetization: applications where large models excel, such as programming and creative generation, and high-value AI applications in traditional verticals like enterprise intelligence and education [3][22]. Financial Projections - The report projects that global AI spending will grow by 37% year-on-year to reach $2.0 trillion by 2026, with significant growth expected in AI application software and AI infrastructure software [8][22].