【AI + Power】Power equipment stocks perform well; Analysis: Differentiate between AI power generation and traditional power generation needs; continue to be optimistic about AI power generation-related stocks

Mainland China promotes the development of artificial intelligence, and the market is focused on investment opportunities in power supply and related infrastructure. Power equipment stocks have continued to perform well since last year but have recently seen some profit-taking along with the overall market. Some analysts warn investors not to recklessly buy power stocks solely because AI data centers demand a lot of electricity. Instead, they should focus on stocks related to electromechanical infrastructure.

The analyst pointed out, “Everyone should distinguish clearly that AI infrastructure is different from ordinary power generation and electricity billing… Those computing centers require stable power supply, but stocks involved in traditional electricity sales are not necessarily in this category. The latter are related to industrial demand, and investors should also pay attention to the mainland government’s policies and direction regarding electricity prices.”

Companies involved in AI data center electricity consumption, such as Weichai Power (02338) and Dongfang Electric (01072), have more than doubled since last year. However, the analyst believes demand will continue to grow, and it is suitable to accumulate in stages. “Reaching the 10-day or 20-day moving average is a good point to start buying.” He also suggests that for those seeking stability, Weichai Power and Dongfang Electric are good options, but for more speculative investors, Chongqing Machinery & Electric (02722) may be worth watching.

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