- Hang Seng Tech Index reached its highest level since 2021, climbing 0.9% on Thursday.
- Chinese tech stocks have posted eight straight weeks of gains, their longest winning streak since the index began.
- Growth is mainly driven by increased investment in Artificial Intelligence by leading firms like Alibaba and advances by Baidu and Chinese AI chipmakers.
- Government support and corporate alliances, including partnerships with NVIDIA, are fueling confidence in the sector.
- Valuations for Chinese tech stocks have surpassed their three-year average, showing a shift from the previous year’s regulatory challenges.
On Thursday, Chinese technology stocks surged as the Hang Seng Tech Index rose 0.9%, matching levels not seen since 2021. Investors drove shares higher across the sector, marking the index’s eighth consecutive week of gains. The rally highlights a period of strong performance for Chinese tech, powered by significant investment in artificial intelligence and support from the government.
The sustained momentum comes after companies like Alibaba increased spending on AI, while Baidu experienced notable stock increases. Chinese AI chipmakers have also contributed to the growth, as reported by Yahoo Finance and The Financial Times. For example, JD.com shares gained 3.5% after announcing plans to build a $140 billion AI ecosystem over the next three years, and Xiaomi shares climbed over 4% ahead of a key product launch.
Government announcements of sector support and corporate partnerships, such as those between Alibaba and Nvidia, have bolstered positive sentiment in the market. Vey-Sern Ling of Union Bancaire Privée said, “AI optimism is surely one factor with Alibaba’s confidence in raising capital expenditure yesterday driving positive sentiment across the tech space.”
Following the approval of trial permits for autonomous driving in Dubai, Baidu shares rose more than 2%. The rising strength of Chinese AI chip manufacturers reflects growing recognition at home and abroad. By the latest trading, Chinese tech stocks were valued at 21.5 times expected earnings, above the three-year average of 18.
This upturn marks a clear reversal from last year’s regulatory difficulties. Recent developments show how investment in AI and strong government backing are reshaping investor attitudes towards Chinese technology companies.
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