CITIC Securities: Traditional Main Business Steady + AI Revenue Gradually Emerging, US Application Software Welcomes Valuation Recovery Opportunity

CITIC Securities research report indicates that the current narrative of "AI devouring software" is gradually being falsified: leading firms' revenues and backlog orders continue to show steady growth, and the fundamentals of application software have not exhibited the structural slowdown previously feared by the market. At the same time, model vendors are driving enterprise-level implementation by embedding into existing workflows such as CRM, ERP, ITSM, and HCM, while traditional software vendors data, industry knowledge, and customer service capabilities still constitute a core barrier. In the short term, the increasing homogeneity of models and the rising proportion of AI revenues in software companies are expected to drive the continued upward adjustment of valuations in the U.S. software sector. From a mid-term perspective, whether the sector can shift from valuation recovery to reversal still depends on whether AI products can stimulate a rebound in the overall revenue growth rate of software companies. The next 1-2 quarters may serve as important observation windows.