Investment Rating - The report suggests focusing on sectors driven by domestic AI development such as servers and IDC, as well as sectors benefiting from overseas AI development like servers and optical modules [4]. Core Insights - Nvidia's H20 sales resumption in China has positively impacted the data center sector, leading to a surge in related stocks, indicating improved market sentiment regarding computing power supply [1][2]. - ASML and TSMC reported better-than-expected Q2 2025 earnings, driven by strong AI demand, with ASML's net sales reaching €7.7 billion, up 23.2% year-on-year, and TSMC's revenue at NT$933.8 billion, up 38.6% year-on-year [1][59]. - The release of new AI models is accelerating technological iterations, with increased demand for inference and agent computing power [1]. - Companies like Zhongji Xuchuang and Xinyi Sheng have reported Q2 2025 earnings that exceeded market expectations, reflecting positive trends in the downstream industry [1][9]. Summary by Sections Server Sector - The server index increased by 4.59% this week and 3.96% this month, driven by accelerated AI computing investments from North American cloud providers like Google and Meta, which plan to invest $25 billion and hundreds of billions respectively in AI infrastructure [2][6]. - TSMC's optimistic forecast for 2025, expecting a 30% year-on-year sales growth, further validates strong downstream AI demand [6][59]. Optical Module Sector - The optical module index rose by 9.17% this week and 10.33% this month, with North American cloud providers driving demand for 800G optical modules [9]. - Zhongji Xuchuang and Xinyi Sheng are key suppliers in this sector, with projected net profits showing significant year-on-year growth [9]. IDC Sector - The IDC index increased by 5.28% this week and 4.31% this month, with the resumption of H20 supply alleviating previous chip shortages, indicating a potential turning point for the AIDC industry [12]. - The report anticipates continued growth in capital expenditures from domestic internet giants in the second half of 2025, supporting the domestic computing power chain [12].

Core Viewpoint - The article highlights the positive impact of the upcoming resumption of H20 chip sales to China on Nvidia's stock price and market capitalization, indicating a significant recovery from previous losses due to trade restrictions [1][3]. Group 1: Nvidia's Market Performance - Nvidia's stock surged over 3% following the news, adding nearly $200 billion to its market capitalization, which now exceeds $4 trillion [1]. - AMD also experienced a stock increase of over 7%, with a market capitalization of approximately $250 billion [1]. Group 2: H20 Chip Resumption and New Product Launch - Nvidia has received U.S. government approval to resume H20 chip sales to China and has submitted a licensing application for the same [1]. - The company announced a new "fully compliant" GPU chip, RTX PRO, aimed at digital twin AI applications in smart factories and logistics, which will be less advanced and cheaper than the H20 chip [3]. Group 3: Financial Implications and Market Analysis - Nvidia faced a loss of $8 billion in the previous quarter due to the H20 ban, and analysts believe the company will strive to regain this market share in China, as no other market can absorb such a large inventory [3]. - The release of the RTX PRO chip is seen as a strategic move to cater to AI inference needs while addressing computational cost issues [3]. Group 4: Competitive Landscape and Market Dynamics - Despite the resumption of H20 sales, uncertainties remain in U.S.-China relations, and Nvidia faces competition from Chinese tech giants like Huawei and other AI chip manufacturers [3]. - Chinese companies are expected to diversify their supply chain options to ensure security and flexibility [4]. Group 5: Importance of the Chinese Market - Nvidia's CEO, Jensen Huang, emphasized the significance of the Chinese market for U.S. companies, noting its size and rapid AI development [6]. - Huang's participation in the upcoming Chain Expo and his first public speech in Chinese reflect the importance of engaging with the Chinese market [5][6].

Core Insights - Jensen Huang will deliver a speech in Chinese at the opening ceremony of the third Chain Expo on July 16, marking his first public speech in Chinese, expressing excitement and nervousness about the event [1][4] - Following the anticipated resumption of H20 chip sales to China, NVIDIA's stock surged over 3%, adding nearly $200 billion to its market capitalization, while AMD's stock also rose over 7% [1] - NVIDIA has received U.S. government approval and submitted an application for H20 chip sales to China, aiming to quickly restart sales in the Chinese market [1][3] Group 1 - NVIDIA announced the launch of a "fully compliant" new GPU chip, RTX PRO, targeting digital twin AI applications in smart factories and logistics for the Chinese market [3] - The lifting of the H20 ban is seen as a significant positive development for NVIDIA, potentially solidifying its leadership position in China and driving revenue growth in upcoming quarters [3] - NVIDIA faced a loss of $8 billion in the previous quarter due to the H20 ban, with analysts suggesting that the company will seek to resume H20 sales in China to address its inventory challenges [3] Group 2 - Huang emphasized the importance of the Chinese market for U.S. companies, noting its size and vibrancy, and highlighted the rapid development of AI in China, which hosts 50% of the world's AI researchers [5] - The Chinese Ministry of Foreign Affairs expressed opposition to the politicization of technology and trade issues, emphasizing that such actions disrupt global supply chains [4]