Why have AI concept stocks surged in popularity with the combination of heavy policies and event-driven factors? Which companies are leading the way in the short-term surge of multiple AI concept stocks in Hong Kong?
The 2024 World Artificial Intelligence Conference opened in Shanghai this week, focusing on key areas such as big models, computing power, robotics, and autonomous driving. Coupled with the release of a heavy industry policy by the Ministry of Industry and Information Technology, the short-term catalyst may bring a boost to the AI concept market in Hong Kong stocks.
On the market, several Hong Kong stocks related to AI servers, data centers, and big model businesses have been on the rise for consecutive days. Some individual stocks have even hit new highs for the year.
Among them,$FIT HON TENG (06088.HK)$, $SENSETIME-W (00020.HK)$, $GDS-SW (09698.HK)$Recently, it has significantly outperformed the Heng Seng large cap index.
Research from JPMorgan shows that the future supply of data centers will be far below the downstream AI demand in the next four years. The institution estimates that the global market's data center gap will be 2GW in 2024, will increase to 3GW in 2025, and will reach 7GW in 2026.
As it is well known, supply and demand gaps usually imply that industry chain companies will receive a large number of potential orders, and even cause related products to enter a pricing cycle and push the industry's prosperity upward.
This year, Fit Hon Teng Precision, which mainly produces optoelectronic modules and connectors, have risen more than 200% cumulatively, which is attributed to the market's bullish view on its AI server business.
CMB International stated that it is optimistic about multiple growth drivers appearing in the second half of 2024 and 2025, benefiting from the strong growth of AI servers, the upswing cycle of AI smartphones/PCs, new projects in the auto business, and the synergy with its parent company Hon Hai Precision Industry in AI servers and iPhone businesses.
In addition, GDS Holdings, which mainly provides data center services, has also seen its stock price double since hitting bottom in February. The company has revealed that it is currently accelerating the delivery of existing orders, with new business orders of using areas reaching a three-year high in a single quarter.
CICC previously pointed out that GDS Holdings has strong overseas demand, with a planned capital expenditure of 4 billion yuan for the whole year. In terms of performance, with the progress of delivery pace, the company's overseas business is expected to maintain strong growth this year.
As for the big models, there are also companies in Hong Kong stock market that have released large model application products, such as SenseTime and Fourth Paradigm.
On July 3rd, driven by the favorable release of the "RiRiXin 5.5" big model, SenseTime's stock price skyrocketed nearly 20% in a single day. In addition, SenseTime also released its first controllable character video generation big model Vimi at the just-opened 2024 World Artificial Intelligence Conference, which also drew market attention.
And the earlier release of the large model platform "Prophet AI Platform 5.0" this year.$FOURTH PARADIGM (06682.HK)$Also through performance growth to verify the feasibility of the business model. In the first quarter of this year, the Prophet AI platform contributed 500 million yuan in revenue to Fourth Paradigm, a year-on-year increase of 84.8%, accounting for more than 60% of the company's total revenue.
It is worth noting that the Ministry of Industry and Information Technology and other four departments jointy issued the "Guidelines for the Construction of National Artificial Intelligence Industry Comprehensive Standardization System (2024 Version)." As a heavy industry policy, it may further drive short-term market sentiment for the AI concept.
Editor / jayden