"Science and Technology Innovation Board Daily" on November 16 (Editor Song Ziqiao) Since November 2023, many AI applications, represented by Microsoft's 365 Copilot product and Adobe's Firefly product, have officially started charging, marking the entry of AI applications into b

"Science and Technology Innovation Board Daily" November 16 (Editor Song Ziqiao) Since November 2023, represented by Microsoft 's 365 Copilot product and Adobe's Firefly product, multiple AI applications have officially started charging, marking the AI applications have entered the commercialization stage. One year after the commercialization process of AI applications was launched, there are more and more signs that overseas funds are switching from hardware to software in mining AI. The value of vertical software companies is accelerating, and the future of the application side is clearer.

The most intuitive manifestation is that Since this year, in the US stock market, many software companies have "quietly worked hard and then surprised everyone" , subverting the impression that only "shovel stocks" such as AI computing power are soaring in the secondary market.

. In addition, the share prices of palantir, Tenet Healthcare have successfully doubled.

Since the third quarter, software platform companies such as tempus, shopify, , Duolingo, , and twilio have continued to catch up, with increases exceeding 30%.

The stock prices of the above-mentioned companies have increased year-to-date

The above-mentioned software companies with outstanding performance are pioneers in product AI, involving marketing, e-commerce, medical care, communications and other segments. Standing at the present moment, how do we view AI+vertical application/tool ​​companies?

ai application user side continues to be active, vertical software vendors show off their profitability,

ai's strong demand is not empty talk. Focusing on the product side, the user data of multiple AI applications has maintained a good growth trend. According to the Guojin Securities research report, judging from the daily activity data of AI applications, the search function launched by chatgpt has helped its activity hit a new high, with an average weekly increase of 11%. The activity of AI search cutting-edge perplexity also continues. The growth shows that the AI ​​search market is still in a period of rapid development.

Source: Guojin Securities

According to the AI ​​product website list, the number of visits to Microsoft's Copilot increased significantly month-on-month in October this year, with an increase of 87%. Among domestic AI applications, the number of visits to Doubao and Kimi has increased steadily, with a month-on-month increase of about 20%; 360 AI search has continued to grow for half a year, with visits reaching 287 million in October. In addition, thanks to the popular overseas product "Conch", the visits to the overseas version of Minimax surged 2773% in October compared with the previous month; Pika's AI pinch video tool went out of the circle, causing Pika's monthly visits to increase by 788% month-on-month in October. The increase is second only to minimax.

At the same time, many vertical software suppliers released further positive signals in the third quarter - confirming that the application side also greatly benefits from AI, and product demand can be transformed into real performance . Companies such as applovin and palantir regard AI as a new growth engine. According to the Science and Technology Innovation Board Daily, in the third quarter of 2024:

applovin’s revenue was US$1.198 billion, a year-on-year increase of 39%; net profit was US$434 million, a year-on-year increase of 300%. Its software platform revenue increased by 66% year-on-year, and the adjusted profit margin of the software platform was 78%. Applovin attributes its success to the Axon 2.0 AI-powered technology it uses on its AppDiscovery platform, with the tool’s improved performance leading to increased advertiser spend.

palantir’s revenue was US$726 million, exceeding Bloomberg’s consensus expectations (US$704 million); net profit was US$144 million, significantly exceeding Bloomberg’s consensus expectations (US$105 million). Palantir also raised its full-year growth guidance. The company said the AI ​​Platform (AIP) has significantly driven Palantir's business growth, especially in the U.S. commercial market. (Xiao K’s note: the aip platform is a data analysis tool launched by palantir that combines the large AI model with its own software)

Microsoft’s Q3 Azure cloud service revenue increased by 33% year-on-year, exceeding expectations. Among them, AI contributed 12 percentage points to Azure’s 33% growth rate, which was higher than the 11 percentage points in the previous quarter.

Tianfeng Securities said that the financial reports of AI application software companies represented by palantir exceeded expectations, showing that AI commercialization is gradually being implemented and AI-related demand is still strong.

The latest research report from Debon Securities stated that the performance of domestic AI applications in 2024q3 has reached an inflection point, and the frequent emergence of new AI products is expected to increase performance contribution .Selecting 9 A-share AI application targets including Kingsoft Office , iFlytek , Flush , and judging from the latest quarterly report of 2024q3, the total revenue was 8.954 billion. yuan, a year-on-year increase of 11%, and the growth rate increased by 3.16pct month-on-month; the total net profit attributable to the parent company was 693 million yuan, a year-on-year decrease of 3.32%, while the year-on-year growth rate in 2024q2 fell by 36.32%, and the q3 growth rate increased significantly by 33.01pct month-on-month.

ai’s next focus: platform companies?

The explosive performance of overseas AI application companies has further verified the feasibility of product commercialization.

Goldman Sachs reminds that needs to pay attention to companies trying to generate new revenue through AI technology in the future, mainly software and it service companies . The agency recently released a report stating that in the next round of artificial intelligence investment, investors should not only focus on the obvious choice of Nvidia and other AI infrastructure companies, but also choose , a series of platforms designed to build AI applications. Microsoft, datadog, database management system mongodb, and software companies elastic and snowflake have launched AI-enabled integrated applications and are the best-positioned "platform stocks."

However, Goldman Sachs also pointed out that the current commercialization progress of AI applications is not as ideal as expected. Goldman Sachs found through an IT spending survey that although corporate investment in AI technology will increase in 2024, only 3% of IT budgets are expected to be used for the development and application of generative AI technology next year. This means that AI-driven revenue growth will be difficult to achieve in the short term, and investors still need to be patient and wait for the further development of AI technology.