(Bloomberg) — Chinese tech stocks extended their rally Thursday, fueled by persistent investor enthusiasm for the country’s artificial intelligence developers.
The Hang Seng Tech Index (HSTECH.HK) climbed as much as 2%, led by gains in JD.com Inc. (JD, 9618.HK), the e-commerce giant with ambitious AI plans, and smartphone maker Xiaomi (1810.HK, XIACF). The index, which tracks Chinese technology companies listed in Hong Kong, is now set for its eighth consecutive weekly advance, the longest winning streak since its inception.
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Chinese technology companies have been on a strong upward trajectory, driven by grassroots AI advancements that gained global attention following surprising breakthroughs by startup DeepSeek. The elevated stock momentum marks a sharp reversal from just a year ago, when the sector was weighed down by regulatory crackdowns and a slowing economy.
Fresh impetus came from the government’s announcement for increased support for the sector, alongside Alibaba Group Holding Ltd.’s plans to ramp up AI spending and its new partnership with Nvidia Corp. These developments helped push the benchmark’s year-to-date gain to about 44%.
“AI optimism is surely one factor with Alibaba’s confidence in raising capital expenditure yesterday driving positive sentiment across the tech space,” said Vey-Sern Ling, managing director at Union Bancaire Privee. Concerns about value-destructive competition in food delivery and quick commerce appear to be easing, given heightened government scrutiny, he added.
JD.com shares rose as much as 7.2%, buoyed by reports that the company disclosed at a conference in Beijing that it plans to continue investing over the next three years to build a trillion-yuan AI ecosystem.
Xiaomi shares gained over 3% ahead of the company’s release of its latest flagship smartphone, the Xiaomi 17, that will compete directly with Apple Inc.’s (AAPL) iPhone 17. Baidu Inc. (BIDU, 9888.HK) shares climbed over 5%, boosted by an announcement that its autonomous driving unit was granted driving trial permit in Dubai.
The rally has also pushed the Hang Seng Tech Index to technically overbought territory, based on its 14-day relative strength index, Bloomberg-compiled data showed. In terms of valuation, the index now trades at 21.5 times forward earnings estimates, above its three-year average of 18.
