Investment Rating - The report maintains a "Recommendation" rating for the communication industry, expecting the industry index to outperform the benchmark index by more than 5% in the next 3-6 months [27]. Core Insights - The report highlights that Broadcom's management has indicated a significant surge in AI inference demand, which is expected to drive a systematic reassessment of profit structures and industry capacity [13][15]. - The AI inference demand has exceeded current capacity, suggesting potential upward revisions in profitability forecasts for Broadcom, with a projected market space of $60-90 billion for three major AI clients by 2027 [13][15]. - The report emphasizes the importance of high bandwidth and low latency networks for AI inference workloads, with a current spending ratio of approximately 3:1 between computing and networking devices in AI systems [14]. Market Performance - The communication sector (Shenwan) rose by 2.13% in the week, outperforming the CSI 300 index by 1.31 percentage points and underperforming the ChiNext index by 0.23 percentage points [6][7]. - Year-to-date, the communication sector has increased by 9.54%, surpassing the CSI 300 index by 7.51 percentage points and the ChiNext index by 6.48 percentage points [6][7]. Stock Performance - The top five gainers in the communication sector for the week were: SanChuan Wisdom (+27.91%), GuoYuan Technology (+27.72%), BoChuang Technology (+19.84%), ShiJia Photon (+14.85%), and ZhongXin SaiKe (+12.46%) [10][12]. - The top five losers were: YouFang Technology (-18.52%), RuiSiKangDa (-13.48%), XuanJi Information (-7.31%), HeZhong ShiZhuang (-5.09%), and RunZe Technology (-4.10%) [10][12]. Investment Recommendations - Key recommendations include focusing on major operators such as China Mobile, China Telecom, and China Unicom [21]. - For optical modules and devices, the report recommends companies like XinYiSheng, TianFu Communication, and ZhongJi XuChuang, while suggesting to pay attention to YuanJie Technology and ShiJia Photon [21]. - In the military/satellite communication sector, recommended companies include HaiGe Communication, Shanghai HanXun, and QiYiEr [21].