Is the Chinese AI supply chain facing a revaluation? Citigroup is optimistic: optical modules > PCB > AI servers
Citi stated that there is potential upside for high-speed optical modules in 2027, primarily driven by untapped expansion opportunities. The tight supply of PCBs may persist into 2026, with the most aggressive manufacturers (such as VGT) potentially gaining additional demand from ASICs while maintaining a solid position in the NVIDIA supply chain
According to news from the Chasing Wind Trading Platform, Citibank analysts recently released a feedback report on the China-US-Europe investor roadshow, summarizing the results of communications with 49 institutional investors over the past two weeks. The report shows that long-term investors' interest in Chinese technology stocks has significantly increased, with market focus concentrated on the AI supply chain.
Citibank clearly prioritizes investments in the AI supply chain: optical modules (with scale-up opportunities) > PCB sector > ODM manufacturers with growing demand for AI servers.
The report specifically points out:
There is potential upside for high-speed optical modules by 2027, primarily driven by unpriced expansion opportunities. The tight supply situation for PCBs may persist into 2026, with the most aggressive manufacturers (such as VGT) potentially gaining additional demand from ASICs while maintaining a solid position in the NVIDIA supply chain.
Regarding China's AI capital expenditure, investors are focused on the investment scale required for Alibaba's data center tenfold expansion, AI chip supply capabilities, and the monetization path for AI investments.
The report indicates that 7-nanometer equivalent wafer capacity should be able to support domestic AI chip demand in 2026 (even if the demand doubles compared to 2025). In terms of AI monetization, investors generally agree that the ToC sector is difficult to monetize, while ToB primarily targets software products for small and medium-sized enterprises. Additionally, investment interest in smart glasses as AI edge devices is also on the rise
