Orient Securities has released a research report stating a positive outlook on coding and multimodal AI as the two key scenarios for commercial monetization by 2026. The commonality lies in the fact that commercial performance is fundamentally determined by the underlying base model capabilities. Leading vendors in coding and multimodal applications are seeing their Annual Recurring Revenue (ARR) growth significantly outpace others, with close monitoring required on whether these leading model vendors can maintain their edge.

The firm is optimistic about the opportunities for major technology companies with a full-stack AI path encompassing hardware, research, models, and application scenarios, as well as for model vendors with comprehensive multimodal technology layouts. It also emphasizes the importance of other companies with model capabilities and the related industry chain, which benefit from iterations in base model capabilities and improvements in downstream application experiences. The main views of Orient Securities are as follows:

Seedance2.0 is accelerating the penetration of AI video demand in the domestic market, with a focus on the consumer (C-end) market in the second half of the year to open up the multimodal generation field. The firm observes that the commercialization efforts of major leading players continue to accelerate significantly. In the AI video segment: ① Seedance2.0 was released in February, and its revenue had already exceeded 10 billion RMB by May and continues to climb, corresponding to an ARR of over 1.7 billion USD; ② Kling reached an ARR of 500 million USD in March (compared to 240 million USD in December 2025 and 300 million USD in January 2026). In the AI audio segment: ElevenLabs reached an ARR of 500 million USD in May (compared to 330 million USD in December 2025).

The firm believes that Seedance2.0 has played a role in educating the domestic market about AI content creation demand. If the barriers to creation continue to lower and inference costs are optimized, downstream demand for multimodal video generation in China in 2026 is expected to continue exceeding expectations.

Furthermore, Volcano Engine recently proposed a new paradigm for AI video creation called Vibe Creating. The firm understands that compared to previous conventional prompt-writing methods, which focused more on stacking professional camera terminology and storyboard breakdowns, Vibe Creating emphasizes complete story expression, making it more suitable for output from novice users. This approach lowers the barrier to prompt writing to some extent, making it more conducive for use by general C-end users. Continuous attention is warranted on changes in C-end user demand.

Anthropic's ARR continues its explosive growth, while new version releases from domestic model vendors are driving an acceleration in commercialization. Anthropic's ARR exceeded 4.7 billion USD in May (compared to 900 million USD in December 2025, 1.9 billion USD in February 2026, and 3 billion USD in March 2026), with its latest valuation reaching 96.5 billion USD, representing a Price-to-ARR multiple of 21x. The latest version, Claude Opus4.8, offers a 2.5x increase in operating speed and a significant 3x reduction in cost.

Domestic model vendors are also entering a period of new version releases. Minimax recently released its M3 model, focusing on enhancing coding and agent capabilities. The company's ARR exceeded 300 million USD in May, and the new version release is expected to accelerate its commercialization pace. Kimi K3 is expected to be officially launched in July.

Additionally, in the vertical segments of coding and agent products: ① Devin (AI programming) reached an ARR of 492 million USD in May (a 5.7x increase from 73 million USD in mid-2025); ② Glean (enterprise agent) reached an ARR of 300 million USD in May.

Investment Recommendations and Targets

(1) The firm is optimistic about major technology companies with a full-stack AI path encompassing hardware, research, models, and application scenarios, as well as model vendors with comprehensive multimodal technology layouts. Related targets include: Alibaba Group Holding Ltd (09988.HK), Alphabet Inc (GOOGL.O), MINIMAX-WP (00100.HK), and Zhipu AI (02513.HK).

(2) Emphasis is placed on other companies with model capabilities and the related industry chain, which benefit from iterations in base model capabilities and improvements in downstream application experiences. Related targets include: Tencent Holdings Ltd (00700.HK), Kuaishou Technology (01024.HK), and Meitu Inc (01357.HK).

Risk Warnings

Risks include slower-than-expected iteration of large model technology, slower-than-expected progress in large model commercialization, and intensifying competition.