Investment Rating - The report maintains an investment rating of "Outperform" for the communication industry, indicating a positive outlook compared to the broader market [5]. Core Insights - The communication industry has shown resilience with a 2.6% increase in the index over the past two weeks, ranking 11th among 31 sectors [2][23]. - Valuation levels are considered high, with a dynamic price-to-earnings ratio of approximately 24.35 times as of December 31, 2025, compared to a historical average of 20.50 times [29]. - Key segments such as BeiDou, military communication, and 5G have experienced significant growth, with increases of 43.3%, 16.2%, and 11.6% respectively over the past two weeks [30]. - Major companies in the sector have seen substantial stock price increases, with top performers like 蘅东光 and 通宇通讯 rising by 878.2% and 32.9% respectively [31]. Summary by Sections Industry Dynamics - North American tech giants are actively engaging in mergers and acquisitions, which is expected to sustain the high demand in the computing power chain [13]. - The fiber optic cable industry is entering a price upcycle, driven by AI computing demand and advanced technology applications [17]. Market Review - The communication sector has outperformed the market over the past year, particularly between June and August 2025, with a notable 2.6% increase recently [23]. - The sector's performance is highlighted by the significant stock price movements of individual companies, with 86 out of 129 stocks rising [31]. Configuration Recommendations - The report suggests focusing on various segments including optical modules, copper interconnects, switches, temperature control equipment, and IDC facilities, as well as operators like China Mobile, China Telecom, and China Unicom [3][36].

Investment Rating - The report suggests a focus on AI consumer applications, embodied intelligence, autonomous driving, and XR technologies, indicating a positive outlook for companies in these sectors [6][24]. Core Insights - The CES 2026 event is highlighted as a key opportunity to observe advancements in AI, particularly in consumer applications such as AI PCs and embodied intelligence [6][24]. - Significant developments in chip technology are anticipated, with AMD, Intel, and Qualcomm expected to unveil new products that enhance processing capabilities [2][11]. - The report emphasizes the evolution of video models into general visual foundation models, showcasing the capabilities of Google DeepMind's Veo 3 [5][14]. - DeepSeek's mHC architecture aims to address the stability issues in training large models, which could lead to more reliable AI applications [18][19]. Summary by Sections CES 2026 Preview - Focus on new chip products from leading companies: AMD's Ryzen 7 9850X3D and Intel's Panther Lake chips, which promise a 50% performance increase [2][11]. - Emphasis on advancements in autonomous driving technologies, with companies like Sony Honda Mobility and BMW showcasing new models and AI systems [3][12]. Technology Industry Dynamics - Google DeepMind's research indicates that video models are evolving into versatile visual models capable of zero-shot learning, enhancing their applicability across various tasks [5][14]. - DeepSeek's mHC architecture is designed to improve the training stability of large models while maintaining high expressiveness, potentially paving the way for larger-scale model training [18][19]. Weekly Insights - The report recommends focusing on companies that can effectively implement AI technologies in real-world scenarios, particularly in hardware and platforms that support multimodal reasoning [6][24]. - Suggested companies for investment include NVIDIA, Tesla, LITE, AVGO, and Google, which are positioned to benefit from advancements in AI and computing infrastructure [6][24].