American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Business

From Alibaba to BYD: DeepSeek breakthrough fuels a tech stock rally in China

by admin February 12, 2025
February 12, 2025
From Alibaba to BYD: DeepSeek breakthrough fuels a tech stock rally in China

Chinese technology stocks have entered a bull market, with the Hang Seng Tech index surging more than 25% from its January low.

The sharp rally follows a renewed wave of investor optimism, driven in part by DeepSeek’s artificial intelligence breakthrough, which has shifted global perceptions about China’s technological capabilities.

The gains come as foreign investors reassess China’s tech sector, with major companies such as Alibaba, Xiaomi, Baidu, and BYD leading the charge.

In contrast, US tech stocks have struggled, with the Nasdaq 100 rising just 4.4% over the same period, and the “Magnificent Seven” recording less than 0.5% gains on an equal-weighted basis.

“Only Chinese internet companies are globally competitive and comparable to the US Magnificent Seven,” said Bush Chu, investment manager for Chinese equities at Abrdn in a report by FT.

That improvement in sentiment has driven some flows back to China. We are starting to see some outperformance and a rally in China in recent weeks because of that.

Alibaba (HKG: 9988), Xiaomi (HKG: 1810), Baidu (HKG: 9888), and BYD lead the rally

Shares of Alibaba jumped more than 6% on Wednesday following reports that the e-commerce giant is working with Apple to introduce the iPhone maker’s AI features in China.

“While we’re almost all talking about DeepSeek and AI advancements coming out of China, other Chinese tech firms are coming out with some pretty amazing stuff,” Brian Tycangco, editor and analyst at Stansberry Research, said.

Other major winners in the AI-driven rally include Xiaomi, up 34%, Baidu, up 13%, and BYD, up 40% over the last month.

E-commerce platforms JD.com and Meituan have also benefited, rising 24% and 11%, respectively.

Their gains have been supported by strong consumption data from the Lunar New Year holiday and rising expectations of fiscal stimulus from Beijing later this year.

The broader Hang Seng index has climbed 15% over the past month, reflecting growing investor confidence in China’s economic outlook.

Mainland China’s CSI 300 index, however, has seen a more modest 4% gain, as concerns over tariffs, a struggling property market, and deflationary pressures continue to weigh on sentiment.

DeepSeek’s AI model reshapes investor sentiment

The market rally was sparked by DeepSeek, a Chinese AI developer that unveiled a large language model in late January, reportedly built with far less computing power than its US counterparts.

The news triggered a global debate over the necessity of large-scale AI investments and led to a sharp sell-off in US tech stocks, with Nvidia losing a record $589 billion in market value on January 27.

While the US market reacted negatively, Chinese tech stocks surged, particularly companies positioned to benefit from AI innovations.

Cloud computing firms, consumer electronics manufacturers, and search engine operators saw strong gains, reflecting investor optimism about AI-driven growth.

Stock Connect program data shows high interest among Chinese investors

Investor enthusiasm is reflected in the sharp increase in trading volumes through the Stock Connect program, which allows mainland Chinese investors to buy Hong Kong-listed stocks.

Data shows that average daily turnover in February was two-thirds higher than in January and three times higher than the same month last year.

Analysts said investors were boosted by the belief that Chinese development of LLMs was advancing and consumer-facing companies would rapidly adopt them.

Citi analysts wrote in a note on February 3 that AI investment in China remains underappreciated by global investors.

“The US is strong in terms of zero-to-one innovation, but China is stronger in terms of one-to-100 innovation, in terms of widening access and adoption of tech,” he said.

As China’s tech sector continues its rapid recovery, investors will be closely watching how AI adoption plays out and whether the momentum can be sustained in the face of geopolitical uncertainties.

The post From Alibaba to BYD: DeepSeek breakthrough fuels a tech stock rally in China appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
Binance to drop 5 trading pairs on February 17: find out which ones
next post
CATL IPO: will the EV battery giant’s Hong Kong debut revive the city’s capital markets?

Related Posts

NFL season expected to spur record $35 billion...

September 4, 2024

Walmart is opening five automated distribution centers as...

July 12, 2024

Fed Chair Powell says there has been a...

April 18, 2024

Sensex smashes 81K: what’s fueling the unstoppable market...

May 2, 2025

SpaceX’s Polaris Dawn crew breaks ground with first...

September 13, 2024

Asian stock close mixed: Nikkei jumps 0.5%, CSI...

April 30, 2025

Will Trump let TikTok operate in US temporarily...

December 23, 2024

Why has the Tata Consumer Products share price...

November 15, 2024

Meta’s Orion glasses could transform the augmented reality...

September 29, 2024

Monday.com stock: will MNDY shares jump 40% to...

November 10, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • Oil prices face litmus test as US-Iran nuclear talks, OPEC meeting to shape market next week

      June 29, 2025
    • GMS stock jumps 29% on takeover interest from Home Depot, QXO, analysts raise PTs

      June 22, 2025
    • Japan’s rice price surge: what’s driving it and why it could spark a political crisis

      June 22, 2025
    • BofA raises STOXX 600 target amid resilient global growth, warns on Mideast risks

      June 22, 2025
    • Palantir co-founder: US must prevent Iranian nukes

      June 22, 2025

    Categories

    • Business (3,245)
    • Investing (2,554)
    • Latest News (2,001)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved