Chinese technology stocks are showing strong momentum again!
Tech stocks in the A-share market generally rose last week. Last weekend, more positive news emerged. Earnings growth in China's tech giants index is expected to reach a major turning point by 2026, potentially outpacing the Magnificent Seven U.S. stocks for the first time since 2022, according to Bloomberg Intelligence.
On Monday, January 12, AI application-related concept stocks on the Hong Kong stock market rose in unison, led by significant gains in two major model companies. $KNOWLEDGE ATLAS (02513.HK)$ soared nearly 30%, $MINIMAX-WP (00100.HK)$ soared over 24%, $WEIMOB INC (02013.HK)$, $MARKETINGFORCE (02556.HK)$ soared over 18%, $FOURTH PARADIGM (06682.HK)$, $MEITU (01357.HK)$, $KINGDEE INT'L (00268.HK)$, $MOBVISTA (01860.HK)$, and other related stocks followed suit, with $MEITUAN-W (03690.HK)$ rising nearly 6% and $BABA-W (09988.HK)$ increasing 4%, approaching its all-time high.
Technology stocks are favored
Technology stocks in the A-share market rose significantly last week, with sectors such as AI applications and semiconductors broadly rising.
Bloomberg noted that Asian tech stocks are off to a strong start in 2026, with investors betting that their growth momentum and outperformance relative to their U.S. peers will continue throughout the year.
Asia's main technology stock index has risen about 6% this year, outpacing the Nasdaq 100 index's 2% rise. Investors are moving capital to Asia, the center of the global semiconductor supply chain. This shift in capital flows reflects growing skepticism about whether U.S. technology stocks can sustain their AI-led rally after years of strong gains.
Major financial institutions remain optimistic about the outlook for Asian markets. Goldman Sachs strategists currently maintain an overweight rating on the sector, citing a surge in demand for artificial intelligence and reasonable valuations as catalysts for further stock gains. Citi also noted that given the importance of Asian technology stocks in the semiconductor supply chain and the potential for upside earnings revisions, long-term global investors continue to steadily increase their holdings in these stocks.
Meanwhile, the Chinese market has become an important factor for investing in Asian technology stocks. In the new year, enthusiasm for China's technological capabilities continues to grow, with the publication of a paper by DeepSeek proposing a more efficient path to AI development, the growing global popularity of Kuaishou Technology's video editing AI model, and policy-level support for innovation.
Earnings growth for China's tech giant index is expected to reach a major turning point in 2026, outpacing the Magnificent Seven for the first time since 2022, according to Bloomberg Intelligence. What's more, this optimism is fueling a growing pipeline of AI companies looking to list in China. Just last week, MiniMax and Zhipu AI both went public.
Institutions: Focus on investment opportunities in the AI application space.
The current AI industry is very dynamic, with foreign companies such as xAI and Anthropic securing funding rounds, while domestic policies targeting “Artificial Intelligence + Manufacturing” are being introduced. Zhipu AI and MiniMax's strong performance after IPO has raised expectations that the upcoming release of DeepSeek-V4 will spark a new wave of AI applications.
CITIC Securities said downstream AI application scenarios are accelerating their transition to the commercial validation stage as model capabilities continue to improve, especially with significant reductions in inference costs and long-context processing costs. Key areas of focus include search and marketing, coding, multimodal applications, agents, and scientific AI. It is expected that the commercialization of related companies will further accelerate.
According to The Information, DeepSeek plans to officially launch the next generation V4 model by mid-February. The progress of V4 can be reflected in several aspects. First is the programming functionality. DeepSeek's preliminary benchmark tests show that V4 outperforms current mainstream models on programming tasks. The second is the ability to handle and parse very long code prompts. Third, it enhances understanding of data patterns across all stages of training without degrading it. Fourth, more rigorous and reliable reasoning abilities.
Open Source Securities pointed out that DeepSeek rose noticeably in the beginning of 2025, not only making domestic large-scale models globally recognized and reshaping the competitive environment of artificial intelligence, but also establishing great influence within the open source community. Since early 2025, the DeepSeek model has continued to evolve, and we expect the release of V4 to bring even more surprises. Due to the recent intensive promotion of the industry, investors are advised to continue to focus on investment opportunities in the AI application space.
Recently, the promotion and competition of AI-applied products by domestic internet companies has been intensifying. Alibaba, for example, released Qwen, an app that can not only participate in conversations but also perform tasks on your behalf, aiming to become the ultimate personal AI assistant. Ant Group introduced a fully modal general-purpose AI assistant called “Lingguang” and a healthcare-specific AI application called “Afu”. The latter boasts 30 million monthly active users and more than 10 million daily queries. Meanwhile, DouBao, owned by ByteDance, has more than 100 million daily active users, and Volcano Engine has become the exclusive AI cloud partner for the 2026 Chinese New Year Festival. Moreover, recent IPOs of leading model companies such as Zhipu AI are expected to have a positive impact on the overall industry development.
Orient Securities believes that AI applications present lucrative investment opportunities, driven by new model iterations and the acceleration of application promotion by major internet companies. Additionally, the computing power supply chain will benefit from increased demand due to accelerated application deployment.
China Postal Securities said that with increased demand generated by AI and policy support, the IDC industry is poised to improve supply and demand dynamics. On the other hand, a return to capital expenditures (Capex) by major companies on AI, increased acceptance of domestic computing power, and slight improvements in NV high-end chips could restart the bidding process and lead to large contracts being awarded. On the other hand, careful energy assessments and limited resource availability in core locations have significantly delayed the unregulated addition of new supply. As a result, in 2026, we expect to enter a realization phase characterized by order recovery, concentrated deliveries, increased rack utilization, and profit release. Both industry occupancy and price signals may improve simultaneously, moving valuations from rock-bottom levels to normal ranges. It is advisable to focus on companies with a strong position in the region and reserves of resources.
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