The Path to AI Winners Amid Stagnant Revenue in China's Top 50 Stocks

Background

Among the 5,508 A-share listed companies that have disclosed annual reports in 2025, the top 50 companies by revenue generated a combined 31.51 trillion yuan, essentially flat compared to 31.54 trillion yuan in 2024—a silent piece of data. Against this backdrop of stagnation, AI server enterprises have seen explosive revenue growth, becoming a rare bright spot. This phenomenon reveals an eternal principle that transcends industrial cycles: when overall growth dries up, winners often expand by seizing losers' market share rather than creating new demand.

Core Observation

The stagnation of the top 50 enterprises' total pie signals a fundamental restructuring of China's economic growth drivers. The era of "growing the pie" (2010-2020), when industry-wide expansion could accommodate most enterprises, has given way to an era of "dividing the pie"—emerging sectors (AI chips, servers) absorb capital and investment while traditional industries (real estate, traditional manufacturing) face squeezed revenues. This is not a gentle story of "industrial upgrading," but rather violent reallocation of capital and resources.

Historical Echoes

Similar phenomena have recurred throughout history: - 1990s Japan: After the bubble burst, electronics companies like Sony and Nintendo achieved substantial growth by seizing funding from traditional industries - Post-2008 Financial Crisis America: Tech enterprises (Apple, Google) saw explosive revenue growth while traditional sectors like retail and automotive contracted

Economic Logic

Three mechanisms are at work:

1. Capital Flow Signal Effect: Investors believe AI is the future, so all new capital floods into AI-related enterprises; "valuation premium" converts into revenue growth (higher valuation → easier financing → more investment → revenue expansion) 2. Customer Migration Effect: Enterprise clients slash traditional IT budgets and redirect all spending to AI infrastructure, creating a "Matthew Effect" (the strong get stronger, the weak get weaker) 3. Production Substitution Effect: As AI server prices decline, they can replace traditional servers and capture marginal demand from legacy markets

Hidden Risks

Revenue stagnation itself is a warning sign. If the top 50 enterprises' combined revenue cannot grow, it signals: - Slowing downstream demand (consumption, investment) - All new revenue derives from market share shifts rather than demand expansion - When the AI server boom fades, these "winners" will face the same stagnation trap

Insights for Decision-Makers

• Investors: Beware whether "AI leaders'" revenue growth rests on illusory valuation premiums or actual demand
• Traditional Industries: Cannot passively wait; must actively pursue digitalization and AI adoption, or risk elimination during internal market reshuffling
• Policy Leadership: Must consider how to stimulate new demand (rather than merely redistributing old demand) and restart overall economic growth