This year, Chinese tech companies have made a stunning comeback, growing by $439 billion. This rise has outpaced their American competitors, many of which have actually lost value. A group of seven major Chinese tech companies, including Alibaba and Tencent, has seen their stock prices climb more than 40%, while a similar group in the US lost about 10%. This shift surprised many experts on Wall Street.
Previously, the Nasdaq index in the US was hitting record highs while Chinese stocks were in a slump due to strict government rules and slow spending. But recently, a new AI tool named DeepSeek changed how people view China’s tech industry. This boost in Chinese stocks has made even longtime skeptics feel hopeful.
Chinese stocks are rallying now, especially after the Chinese government announced support for tech firms and several new AI tools from companies like Alibaba. Charu Chanana, a strategist at Saxo Markets, noted that China’s tech innovation should not be underestimated, even with US chip export limits.
Societe Generale identified a group of seven leading Chinese companies based on their size and growth. These companies are now trading at about 18 times their expected earnings, which is over 40% cheaper than similar American companies.
The Hang Seng Tech Index, a measure of Chinese tech performance, recently rose more than 1% in a day and 10% in a week. However, US tech stocks are facing challenges. Concerns are growing about high valuations, and US trade policies under President Trump are creating uncertainty for businesses and investors.
While Chinese stocks are gaining strength, they still have a long way to go. The Hang Seng Tech Index is still about 40% lower than its peak in 2021, and its return over the past five years is much less impressive than the Nasdaq’s strong performance. Despite this, many investors are now seeing China as a better option due to worries about US stocks and the positive signs coming from China’s tech sector.
Experts like Vey-Sern Ling from Union Bancaire Privee believe that Chinese tech is ready to succeed, thanks to government support, improved earnings, and growth in AI. With US tech experiencing challenges, there’s a growing trend of investors moving their money from the US to China and Europe.
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