Investment Rating - The report maintains a "Positive" investment rating for the communication industry [11]. Core Insights - The communication sector experienced a decline of 1.85% in the 21st week of 2025, ranking 26th among primary industries in the Yangtze River region. Since the beginning of 2025, the sector has decreased by 4.71%, also ranking 26th [2][5]. - Recent releases of AI models, such as Google's Gemini 2.5 and Anthropic's Claude 4, continue to drive demand in data center communications, indicating a sustained positive outlook for AI and computing power [2][9]. - The current valuation of the telecommunications business segment remains low, suggesting a high cost-performance ratio for overall industry allocation [2]. Summary by Sections Market Performance - In the 21st week of 2025, the communication sector saw a 1.85% decline, with a year-to-date drop of 4.71%, both placing it 26th among primary industries [2][5]. - Among companies with a market capitalization above 8 billion, the top three gainers were Dongtu Technology (+14.5%), Haige Communication (+12.8%), and Mengwang Technology (+11.7%). The largest decliners were Lian Te Technology (-10.5%), Taicheng Light (-10.2%), and Cambridge Technology (-8.9%) [5]. AI and Computing Power Developments - Google's annual developer conference introduced the Gemini 2.5 series, enhancing multi-modal capabilities and platform integration, which is expected to bolster the AI ecosystem [6]. - Anthropic launched the Claude 4 series, focusing on coding capabilities and tool usage, with the Claude Code programming assistant now operational [7]. - Huawei's KADC 2025 emphasized the integration of AI and computing power, showcasing advancements in their software and hardware platforms [8]. Investment Recommendations - The report recommends focusing on several key players: - Telecom Operators: China Mobile, China Telecom, China Unicom [9]. - Optical Modules: Zhongji Xuchuang, Xinyi Sheng, Tianfu Communication, with a focus on Taicheng Light and Shijia Photon [9]. - Domestic Computing Power: Fenghuo Communication, Huafeng Technology, Yingweike, Runze Technology, Guangxun Technology, ZTE, and Unisplendour, with attention to Kehua Data and Aofei Data [9]. - IoT: Heertai, Tuobang, Yiyuan Communication, Meige Intelligent, and Aojie Technology [9]. - Satellite Applications: Haige Communication and Huace Navigation, with a recommendation to monitor Chengchang Technology [9].