Bank of America Securities stated that the average increase of the 18 mainland software and datacenter stocks covered by the bank last week was 24%, outperforming the 13% increase of the MSCI China Index, Hang Seng Index, and Shanghai Composite Index, benefiting from the improved investor sentiment brought by the mainland's loose measures. Despite the limited short-term impact of loose measures on the fundamental factors of software stocks, the bank believes that potential improvements in software spending next year will trigger strong value restoration in industry stocks after more than two years of value downgrades.

The bank prefers Kingsoft (03888.HK) for its strong gaming industry and office software AI monetization capabilities, ZhongSoft (00354.HK) for the predicted demand recovery in the second half of the year, and GDS Holdings (09698.HK)(GDS.US) for the AI-driven demand, noting that these stocks have higher growth visibility. In addition, the bank also prefers Kingdee (00268.HK), as well as Beijing Kingsoft Office Software, Inc (688111.SH) and Heng Seng Electronics (600570.SH) listed in the mainland.