Core Viewpoint - The technology sector showed mixed performance in February, with US cloud vendors raising capital expenditures, but concerns over capital return rates and cash flow increased, putting pressure on some cloud services and SaaS segments. The focus of narratives and valuations has shifted towards computing power, advanced processes, equipment, storage, CPO, and liquid cooling [1]. Group 1 - The demand for computing power is expected to continue exceeding expectations both domestically and internationally, with upstream segments likely to maintain a favorable outlook and price increases, making it a clear growth direction for technology sector allocation [1]. - Recent developments from overseas companies like OpenAI and Anthropic are driving demand for cloud computing power and tokens beyond expectations, with dual growth in inference and training due to competition in large models. However, ROI and cash flow remain variables, making upstream segments more certain for performance growth [1]. - Domestic large models are rapidly iterating, with models like GLM-5, KIMI K2.5, and Seedance 2.0 gradually closing the gap with overseas counterparts, achieving usability and price increases in areas such as coding and video generation, indicating extreme tightness in computing power [1]. Group 2 - Upcoming events such as NVIDIA's GTC and OFC conferences may validate new technology trends in CPO/NPO and LPU, with a dense release period for next-generation large models starting in March. Domestic DeepSeek V4+ and Ascend 950 are expected to launch, suggesting a focus on new technology trends and domestic computing power [2].

Core Viewpoint - The report from CITIC Securities indicates that while U.S. cloud vendors have collectively increased their capital expenditures (Capex), concerns regarding capital return rates and cash flow have intensified, putting pressure on certain cloud services and SaaS sectors. The focus of narratives and valuations is shifting towards computing power, advanced processes, equipment, storage, CPO, and liquid cooling [1] Group 1 - The demand for computing power is expected to continue exceeding expectations both overseas and domestically, leading to sustained prosperity and price increases in upstream sectors, which is seen as the most certain mainline for "growth" in the current technology sector [1] - Recent developments from overseas companies like OpenAI and Anthropic are driving demand for cloud computing power and tokens beyond expectations, with competition in large models leading to growth in both inference and training, while CSPs continue to revise their investments [1] - Despite the positive outlook for upstream performance growth, there remain variables concerning ROI and cash flow [1] Group 2 - Domestic large models are rapidly iterating, with models such as GLM-5, KIMI K2.5, and Seedance 2.0 gradually closing the gap with overseas counterparts, with some models achieving usability and price increases in coding and video generation applications, reflecting extreme tightness in computing power [1] - Prices across the entire industry chain, from cloud services, tokens/APIs, to storage, advanced manufacturing, optical communication, liquid cooling, and electricity, are generally on the rise [1]