Investment Rating - The report does not explicitly state an investment rating for the industry, but it suggests a positive outlook on domestic AI hardware and software ecosystems, indicating potential investment opportunities in related sectors [3]. Core Insights - The domestic AI hardware and software ecosystem is continuously improving, with significant developments in computing power and large model capabilities [3]. - The report highlights the ongoing expansion of domestic computing power ecosystems, with companies like Moer Thread and Muxi Co. initiating IPO processes to fund AI-related projects [3]. - Major advancements in large model capabilities are noted, particularly with Alibaba's Qwen VLo and Tencent's Hunyuan-A13B, which are expected to enhance AI applications [3]. - The report emphasizes the potential for accelerated domestic chip localization and the growth of related industries, recommending attention to domestic wafer fabs, advanced packaging, semiconductor equipment, and computing servers [3]. Weekly Market Review - The TMT sector experienced varied performance, with media leading at 2.70% increase, while electronics and computing sectors lagged behind the Shanghai Composite Index [3]. - Notable sub-sectors with significant gains include gaming (8.36%) and printed circuit boards (8.31%), while other communication equipment and digital chip design faced declines [3]. Industry News and Key Company Announcements - Key events include the upcoming release of new foldable smartphones by Samsung and the pre-sale of AI glasses by Meta and Oakley [15]. - The report mentions various AI model developments, including Google's Gemini video generation model and Baidu's MuseSteamer for video generation [17][19]. - The report also notes significant investments in AI infrastructure, such as Alibaba Cloud's expansion of data centers in Malaysia and the Philippines [24].

Core Viewpoint - The recent trading week saw the Shanghai Composite Index (SSE) reaching new highs, attempting to breach the 3500-point mark, but the market exhibited uneven performance with many stocks not recovering from previous lows [2][4]. Market Performance - During the week, 2890 stocks rose, 98 remained flat, and 2430 declined, indicating a less favorable market compared to the previous week where 4818 stocks rose [2][3]. - The SSE closed at 3472.32 points after fluctuating between 3466.55 and 3497.22 points on Friday, reflecting a lack of substantial gains [2]. Sector Analysis - The recent highs in the SSE were primarily driven by large financial sectors, while technology growth sectors lagged behind [4]. - The average stock price for the entire A-share market was 21.76 yuan, approximately 5% below the March high of 22.84 yuan, indicating many stocks have yet to recover from previous declines [4][6]. Economic Outlook - The chief economist at Founder Securities highlighted three main reasons for the recent strength in A-shares: low overall valuations, diminishing external risks, and improving quality of listed companies [7]. - The cumulative dividend payouts from A-share companies have significantly increased, from less than 300 billion yuan in 2010 to over 1.9 trillion yuan in 2024, enhancing investor returns [7]. Investment Opportunities - There are expectations for a phase of catch-up in sectors such as brokerage and technology boards following the index highs [7]. - The upcoming earnings season is anticipated to provide investment opportunities, with 15 companies expected to report over 90% year-on-year profit growth [8]. Valuation Metrics - The average price-to-earnings ratios for the SSE and ChiNext are 14.21 and 38.6, respectively, indicating a suitable environment for medium to long-term investments [9]. - The market is expected to maintain a steady upward trend, with a focus on sectors like finance, electricity, software development, and gaming for potential investment opportunities [9].