Western Securities: Overseas AI growth may slow, while domestic capital expenditures take the baton—bullish on Hong Kong-listed internet stocks

Cao Liulong’s team at Western Securities points out that the Democratic Party’s sweeping victory in the U.S. midterm elections has triggered the tangible realization of a series of overseas “imported risks,” prompting a quiet yet profound shift in global asset pricing logic.

Following the finalization of election results, market concerns over potential delays in U.S. AI data center (AIDC) construction have intensified significantly. At the same time, expectations of easing U.S.–Iran relations have also risen—both factors jointly driving U.S. Treasury yields and the U.S. dollar exchange rate lower in tandem.

The Democrats’ core campaign pledges—ending the U.S.–Iran conflict and slowing the pace of AIDC expansion—collectively anchor a medium-term bearish trend for the U.S. dollar from a policy perspective. This dynamic is further reinforced by the impending expiration of year-end stopgap funding and the looming debt ceiling negotiations early next year, widening the window for dollar weakness.

Beneath the surface slowdown in overseas AI development lies a deeper structural tension—growing friction over benefit distribution among tech firms, ordinary citizens, and the federal government—a contradiction unlikely to be fundamentally resolved in the near term.

In sharp contrast, leading Chinese tech firms currently operate from a relatively low base of capital expenditures and enjoy significantly lower financing costs than their U.S. peers. The AI industry landscape between China and the U.S. is quietly entering a new narrative phase: “East rising, West falling.”