Group 1 - The report maintains an overweight rating on the computer industry, emphasizing the rapid development of AI driven by advancements in models, computing power, and applications [2][3] - The domestic open-source models are narrowing the performance gap with international closed-source models, presenting both technical and cost advantages that may reshape the global AI competitive landscape [5][30] - The demand for AI computing power is expected to remain high, supported by significant capital expenditures from leading companies like OpenAI, Alibaba, and Tencent [5][35][42] Group 2 - The report highlights the importance of domestic AI computing power and trusted innovation investment opportunities, driven by external pressures and strong policy support [5][30] - Domestic technology giants are actively developing supernode technology to overcome limitations in single-chip processing, aiming to establish a self-controlled and open computing foundation [5][31] - The software sector is witnessing a shift from reliance on foreign products to domestic alternatives, with significant progress in databases and operating systems [5][31][34] Group 3 - The investment strategy for 2026 focuses on two main lines: AI and self-control, with an emphasis on companies that can leverage AI technology for performance growth [5][39] - The AI market is projected to grow significantly, with enterprise-level AI agents expected to create direct business value and enhance operational efficiency [5][48][50] - The report suggests that SaaS companies are well-positioned to benefit from the rise of enterprise-level AI agents due to their existing data resources and customer bases [5][55]

Group 1 - Tesla's 2025 shareholder meeting approved Elon Musk's $1 trillion compensation plan, with over 75% of shareholders in favor [4] - Tesla plans to mass-produce Cybercab by April 2026, targeting an annual capacity of 5 million units [4] - The price of chromium has shown a significant upward trend, with metal chromium priced at 79,060 RMB/ton as of November 7, 2025, reflecting a 2,020 RMB increase from October 31 [14] Group 2 - The automotive sector underperformed the Shanghai Composite Index from November 3 to November 7, 2025, with the automotive index down 1.2% [3] - Xpeng Motors announced the launch of three Robotaxi models in 2026, featuring high computing power and a vision-based approach [6] - The new generation of humanoid robots from Xpeng, named IRON, is set for mass production by the end of 2026, featuring advanced AI capabilities [6] Group 3 - The new materials sector is expected to experience rapid growth due to increasing demand and policy support, with a focus on electronic information, new energy, and biotechnology [42] - The new energy sector, particularly in storage, has seen significant developments, with over 100 million kilowatts of new storage capacity installed in China by the end of September 2025 [48] - The chemical industry is anticipated to enter a growth cycle, driven by reduced competition and increased demand for specific sectors [41]

Investment Rating - The report maintains an "Outperform" rating for the communication industry [6]. Core Insights - North American optical communication companies have shown strong quarterly performance, with significant growth in data center interconnect (DCI) demand [11]. - The global computing infrastructure continues to experience high demand, driven by advancements in AI and related technologies [5][29]. Summary by Sections Industry News Tracking - Fabrinet reported a Q1 FY2026 revenue of $978.1 million, a 22% year-over-year increase and an 8% quarter-over-quarter increase, with DCI revenue reaching $138 million, up 92% year-over-year [11]. - Coherent's Q1 FY2026 revenue was $1.581 billion, a 17% increase year-over-year, with a Q2 revenue guidance of $1.56 to $1.70 billion [15]. - Lumentum's Q1 FY2026 revenue was $533.8 million, with a Q2 revenue guidance of $630 to $670 million [17]. - The launch of the scaleX640 super node by Inspur further enhances domestic computing power capabilities [19]. - NVIDIA's StarCloud-1 satellite has been launched to test AI computing capabilities in space, while Google has initiated the "Project Suncatcher" to deploy AI infrastructure in space [25][29]. Market Performance Review - The communication index rose by 0.92% this week, outperforming the Shanghai and Shenzhen 300 index, which increased by 0.82% [50]. - The optical devices/chips, operators, and satellite internet sectors performed relatively well [50]. Investment Recommendations - Continuous focus on AI computing infrastructure development is advised, with recommendations to pay attention to optical devices (e.g., Zhongji Xuchuang), communication equipment (e.g., ZTE), and liquid cooling technologies [60]. - The three major telecom operators are highlighted as important assets for dividend allocation, with stable operations and increasing dividend ratios [60]. - Key recommended stocks for the upcoming week include China Mobile, Zhongji Xuchuang, ZTE, Yingwei, and Guanghetong [60].