The investment focus within the Token economy is shifting from upstream infrastructure towards downstream AI applications and leading midstream players, according to a new analysis. The report suggests a strategic reallocation is underway as the industry matures.
CGS conducted a cross-analysis of "Token consumption density" and "scenario ROI," categorizing SaaS companies into four quadrants. The firm currently highlights investment opportunities in SaaS companies within scenarios such as code development, enterprise knowledge bases/office work, finance, and industry, particularly those capable of achieving a high degree of AI integration and agentization.
Token Economy Emerges, Reshaping AI Industry Value Chain
The development paradigm of the AI industry is undergoing a major transformation, shifting from the "traffic economy" of the internet era to the "Token economy" of the AI era. The role of Tokens is expected to transition through three stages: from a technical unit to a "pricing unit," then to a "settlement unit," and ultimately to a "production factor and value carrier."
Historical Context: Investment Strategy to Gradually Shift Towards Downstream Application Beta and Leading Midstream Alpha
Referencing capital cycle theory, the initial phase of massive capital expenditure has driven a surge in scenario-side applications, transforming infrastructure into Token factories. The industry is now entering a period of relatively stable returns. Profit within the industrial chain is shifting from upstream hardware constraints to energy constraints and a more rational distribution across three tiers. Consequently, investment strategy is progressively pointing towards downstream AI applications, top-tier midstream leaders, and the synergy between computing power and electricity.
Overseas Parallel: Investment Cycle Points to Midstream and Downstream
From an industrial chain perspective, major U.S. tech firms have established a clear upstream-to-downstream transmission mechanism for Token computing power investment. The growth rate gap between upstream, midstream, and downstream segments is gradually narrowing. In the first half of 2024, the upstream growth rate was approximately 20 times that of the midstream and 35 times that of the downstream, indicating a significant disparity. By Q1 2026, projections show upstream growth at 65.47%, midstream at 18.73%, and downstream at 21.64%. This means the upstream growth rate is about 3.5 times that of the midstream and 3 times that of the downstream, representing a substantial convergence of the gap. This suggests that the high prosperity of the upstream segment has been fully priced in and its growth inflection point has passed, while the midstream and downstream are in the early stages of an upward trend reversal. Within the Token economy industrial chain, the optimal investment zone has now shifted from the upstream computing power chain to midstream model platforms and downstream application terminals.
SaaS Industry Faces Differentiation and Rebirth in the Token Era
From an industry evolution standpoint, the Token economy is driving the transformation of SaaS from "tool software" to "intelligent service." This will lead to a significant differentiation among SaaS companies in the Token era. The logic of this split depends on whether AI acts as an "incremental driver" or a "stock eroder" for their business. From a valuation perspective, historically, "cloudified" SaaS trends corresponded to an average PS ratio of 15-20x. Currently, the PS ratios for most domestic SaaS companies have fallen to the 5-10x range. In contrast, the average valuation multiple for representative overseas SaaS companies has significantly recovered to 18.6x. The degree of AI integration and Tokenization is expected to become the core anchor for the next phase of SaaS valuation reassessment.
Risk Factors to Consider
The analysis concludes by highlighting several risk factors, including geopolitical and export control risks, the risk of industry oversupply, the risk that commercialization of AI applications may fall short of expectations, and the risk of intensified industry competition.
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