JPMorgan Sees $544B Cumulative Operating Profit for China AI Value Chain
JPMorgan has launched its first systematic research coverage of China's AI value chain, assigning a constructive view to the sector. The report projects cumulative operating profit across China's AI value chain to reach $544 billion between 2026 and 2030.
The model and application layer are expected to contribute nearly two-thirds of the industry's profit growth, while hardware's share of profits is projected to fall from 93% in 2026 to 30% by 2030. This transformation implies that current market pricing still reflects the existing revenue distribution and has yet to fully price in the shift in profit structure.
JPMorgan's top picks are Alibaba, Tencent, and Zhipu, all rated Overweight, with new coverage also initiated on SenseTime, Meitu, Kingdee International, and several others. The bank's analysis suggests that investment opportunities are gradually shifting from hardware infrastructure toward downstream model and application layers.