The Zhitong Finance App learned that Morgan Stanley released a research report saying that according to the bank's AlphaWise China Chief Technology Officer (CIO) survey for the second half of 2026, the Chinese artificial intelligence market is entering the commercialization stage, and companies have strong intention to adopt it. It is expected that the investment value of artificial intelligence will gradually move up along the energy, chip, cloud and model layers, and eventually to the application layer; the bank believes that enterprise software, AI agents and industry applications may become the biggest beneficiaries in the next phase. The IT service and software industry in Greater China is rated as “in sync with the big market”.
The bank pointed out that China's surveyed CIO raised its IT spending growth forecast to 6.1% in 2026, up from 4.8% in the first half of the year; the initial budget growth forecast for 2027 accelerated to 9%. The company's technology upgrade became the primary factor affecting IT spending at 41% for the first time, surpassing business growth (30%) and the macro environment (25%), for the first time since the AI era. The 2026 budget increase was mainly driven by hardware, while software and service budgets are being squeezed; however, software and services are expected to grow by more than 9% in 2027, while hardware is 5.5%.
According to the report, 56% of companies funded AI projects with a new budget (45% in the first half of the year), and more AI spending was added rather than replaced. Enterprise AI adoption is progressing well, and 37% have launched their first AI/big language model project (27% in the first half of the year). Private deployment and domain-specific models are the most popular, and DeepSeek is gaining momentum on the enterprise side.
The bank believes that the main constraints for enterprises to use AI are data readiness, security, model reliability, and cost optimization rather than requirements or model capabilities. These fields also bring significant opportunities to software vendors. In terms of ERP artificial intelligence applications, I recommend Kingdee International; in terms of private cloud and security, I recommend Shenzhen Trust Service (300454.SZ); I am also optimistic about Alibaba-W (09988) cloud business, and Workbuddy of Tencent Holdings (00700). The bank raised the target price of Kingdee International (00268) from HK$11.4 to HK$12.8. The rating was “increased” and its revenue and profit forecast for 2027 and 2028 was raised.