2024 is known as the year of artificial intelligence applications. With the breakthrough of technology and the expansion of application scenarios, "AI+" will inject development driving force into various industries and fields, helping thousands of industries to "accelerate".
AI opens up a commercial application trend in the second half
In the continuous upgrading process of artificial intelligence (AI) technology, the commercial application of AI has become the key to determining the sustained strength of AI investment. Since the explosion of generative artificial intelligence, large models have swept the world like a whirlwind. At present, big models have embarked on a new track of integration with the physical industry, starting to compete for applications and implementation.
Recently, Microsoft updated multiple AI products at the "Microsoft Igniti2024" global developer conference, launching AI assistant tools and Azure AI Foundry platform to help enterprises enhance business process automation and efficiency.
Since the beginning of this year, the development of AI applications has accelerated and reached a turning point of explosive growth. North American AI application companies represented by AppLovin and Palantir are leading this trend. According to data, as of November 20th, AppLovin has seen a cumulative increase of 727.33% for the year, and its latest market value has exceeded $100 billion. Palantir's cumulative increase was 260.51%, while AI chip giant Nvidia's increase during the same period was 194.66%.
According to the latest quarterly financial reports disclosed by the three US stock companies mentioned above, AppLovin's revenue reached $1.2 billion in the third quarter of 2024, a year-on-year increase of 39%; The net profit was $434 million, a year-on-year increase of 300%. Palantir's third quarter revenue was $726 million, a year-on-year increase of 30%, exceeding market expectations; Net profit of $144 million, reaching a historic high. Nvidia's third quarter revenue was $35.08 billion, a year-on-year increase of 94%, exceeding analysts' expectations of $33.1 billion; Under GAAP rules, net profit was $19.309 billion, a year-on-year increase of 109% and higher than market expectations of $17.4 billion.
Tianfeng Securities believes that the performance of companies such as AppLovin indicates that AI application companies will gradually enter the stage of realizing AI technology, and it is recommended to continue to pay attention to the commercialization process of AI. Xinda Securities stated that AI remains one of the strongest narratives in the technology field, and investment opportunities focused on applications should be emphasized in the future.
Huaxi Securities stated that from the perspective of the computer industry, AI+national industrialization is the core industry logic of the computer industry in 2025. AI has already affected everyone's work and life from various dimensions, and it is expected that 2025 will usher in an explosive period of AI applications, with continued investment opportunities in computing power and application side.
Artificial Intelligence Generated Content (AIGC) is currently one of the main areas of AI application. In the personal domain, AIGC technology meets the daily life needs of individuals, covering multiple scenarios such as Chatbot, social, gaming, education, and content creation.
According to predictions from Bloomberg Intelligence cited by Private Placement Network, with the explosive growth of various AIGC applications, the global AIGC application market is expected to grow from $1.86 billion in 2022 to $661.8 billion in 2032, with an average annual compound growth rate of 80%.
High frequency research and development of AI application concept stocks by institutions
AI technology itself has extremely high technical complexity and innovation. In order to develop efficient and stable AI applications, a significant amount of research and development work is required. Among the numerous AI application concept stocks in A-shares, there are 67 stocks with R&D expenses exceeding 100 million yuan in the first three quarters of this year, and R&D expenses accounting for more than 5% of revenue.
Institutions conduct high-frequency research on listed companies, allowing investors to have a more detailed understanding of their operating conditions and project progress. According to statistics from Securities Times Data Treasure, among the 67 AI application concept stocks with high R&D investment mentioned above, 34 have received institutional research more than 5 times this year. Among them, 4 stocks have received institutional research more than 20 times, namely Central Control Technology, Yuanguang Software, Liard, and Tom Cat.
The most frequent institutional research is on central control technology, with a total of 75 institutional research conducted within the year. The company's developed Zhongkong Zhiwen is an AI application development and management software that integrates cutting-edge technologies such as Large Language Model (LLM) and Intelligent Agent (AI Agent). Its aim is to unleash the potential of enterprise AI and build an industrial AI value system. In June 2024, the company released the first AI temporal large model TPT for process industry.
Yuanguang Software has received a total of 38 institutional surveys within the year. The company relies on the Yuanguang Jiutian platform and integrates technologies such as artificial intelligence, big data, and blockchain to launch a series of domestically produced, replicable, and promotable full stack applications, represented by the new generation enterprise digital core system Yuanguang DAP.
Liad received 23 surveys within the year. The company's optical motion capture technology can be used for accuracy verification and evaluation of AI glasses positioning, 4D gesture tracking, etc. Currently, it has provided products to multiple AR/VR glasses manufacturers at home and abroad. In the field of AI and spatial computing, the company's solutions have covered nine major industries including film and television, gaming, sports, and cultural arts.
Tom Cat has received 21 surveys within the year, and the company is currently developing a series of AI products including Tom Cat AI voice robots, AI storytelling apps, AI games, and more.
Among the 34 concept stocks that have undergone high-frequency research and high R&D by the above-mentioned institutions, the latest closing price of 9 stocks has a drawdown of over 20% compared to the high point of the year, including Yidao Information, Wanxing Technology, Xinghuan Technology-U, Zhiyuan Internet, Zhongke Chuangda, etc. From a financial perspective, only three institutions have net purchased over 100 million yuan since November, namely Worth Buying, Focus Technology, and Tom Cat.
From the perspective of valuation level, as of the close on November 21, the rolling price to earnings ratios of five stocks were below 30 times, namely Huashi Group, Shenzhou Taiyue, Kaiying Network, Shiyuan Shares, and Focus Technology. The net asset ratios of 7 stock markets are below 2 times, including Shangpin Home Delivery, Qianfang Technology, Huashi Group, Zhouming Technology, Liade, Delma, and Yanshan Technology.