Event: On

November 19-21, 2024 local time in the United States, Microsoft held the "Microsoft Ignite2024" global developer conference, and released a number of new products and features around AI assistants, including updates to Microsoft Copilot.

Opinion:

Microsoft has released a number of updates to take the AI Agent ecosystem to the next level. Among them, in terms of Microsoft 365Copilot, Microsoft has updated a number of assistants for work scenarios, which can enable agents to complete some workflows that require repetitive operations, generate meeting notes in real time, provide interpretation in real time, and automate project management. These include: Assistant in SharePoint (generally available), Employee Self-Service Agent in BizChat (private preview), Host agent in Teams (preview), and more. In terms of Microsoft Copilot Studio, Microsoft has introduced the autonomous agent function and agent library, which aims to provide users with commonly used assistant scene templates and help users build assistants that can respond in the background, and these updates are currently in preview. In addition, according to Microsoft's official statement, nearly 70% of Fortune 500 companies are using intelligent Microsoft 365 Copilot co-pilot, and AI assistant products are developing strongly.

The implementation of AI applications at home and abroad is accelerating, and the application scenarios are expected to continue to expand. In 2024, the stock prices of some overseas AI application companies will rise significantly. Specifically, AppLovin, Shopify, Duolingo, ServiceNow and SalesForce saw the largest increases of 787.65%, 138.10%, 127.93%, 66.41% and 65.07% respectively during the year. Its landing scenarios are mainly concentrated in scenarios such as AI + advertising and marketing, AI + education, and AI + office. Domestically, data from October shows that the growth rate of AI applications such as Kimi intelligent assistant and Zhipu Qingyan is considerable, reaching 36.45% and 20.59% respectively. As of September, the number of agents on platforms such as Tongyi, iFLYTEK Xinghuo, and Doubao exceeded 16,000, 11,000, and 9,000 respectively. We believe that the recent technology iteration of overseas AI application vendors and the data on the number of AI application visits show that the business models of some AI applications are gradually clear, and users' willingness to pay is gradually increasing.

The implementation of AI applications may promote a new round of computing power demand growth, and we continue to be optimistic about investment opportunities in the computing power sector. The intensive implementation of AI applications may increase the demand for high throughput and low latency of computing platforms, and promote the development of edge computing.

At this stage, under the wave of AI superimposed on the demand for independent and controllable technology, China's domestic demand for science and technology is expected to be boosted, and all aspects of the domestic computing ecology are expected to accelerate the improvement.

Investment suggestion: We believe that under the current overseas mapping, the high prosperity of the AI industry is expected to be maintained, the growth rate of domestic AI application visits and users' willingness to pay is stable and improving, and the domestic potential user base is huge, so we are optimistic about the explosive potential of the domestic AI application industry. At the same time, under the current international situation, domestic demand for science and technology is expected to continue to expand, and the demand for domestic computing software and hardware may further grow. To maintain the "recommended" rating of the computer industry, it is recommended to pay attention to: (1) Application side: Kingsoft Office (688111. SH), iFLYTEK (002230. SZ), Foxit Software (688095. SH), Zhiyuan Internet (688369. SH), Yonyou Network (600588. SH), Color News Co., Ltd. (300634. SZ）； (2) Computing power side: Sugon (603019. SH), Inspur Information (000977. SZ), the Great Wall of China (000066. SZ), Digital China (000034. SZ）。

Risk warning: the pace of domestic substitution is less than expected; the risk of error in the data cited; AI investment is not as strong as expected; intensified competition in the industry; Focus on the company's performance not meeting expectations; Policy standards have not been introduced as quickly as expected.