Chinese tech stocks soar as AI boom fuels a rally in Baidu, Alibaba, JD.com & SMIC. Hang Seng Tech Index hits 4-year high. Read full analysis.
Table of Contents
China Tech Stocks Jump as AI Boom Pushes Index to Four-Year High
Introduction
Chinese technology stocks surged on Wednesday, driven by a renewed wave of investor confidence in artificial intelligence (AI). The Hang Seng Tech Index climbed nearly 3.9%, reaching its highest level since November 2021. Leading the rally was Baidu Inc., with shares jumping almost 19%, followed by Alibaba, JD.com, and SMIC, which all recorded significant gains. The AI-fueled rally has put China’s tech industry back in the global spotlight, raising hopes of a long-term comeback for investors.
AI Frenzy Lifts Chinese Tech Giants
- Baidu: Shares surged on the back of strong AI product rollouts and optimism around in-house chip development.
- Alibaba: Boosted by bullish analyst upgrades and its growing cloud business.
- JD.com: Jumped over 6% after chairman Richard Liu ruled out a destructive price war in the hotel sector.
- SMIC (Semiconductor Manufacturing International Corp.): Rose after reports of trials on advanced domestic chipmaking equipment.
The Hang Seng Tech Index is now on track for its seventh consecutive week of gains, outperforming regional peers with a 41% rally in 2025 alone.
Why Investors Are Betting Big on AI in China
According to Bloomberg Intelligence, Chinese tech firms will double their capital expenditure on AI, from $13 billion in 2023 to $32 billion in 2025. Companies like Alibaba, Tencent, Baidu, and JD.com are racing to expand:
- AI models and large language systems
- Robotaxis and autonomous driving
- In-house chip development
- Cloud computing infrastructure
This massive investment wave is also fueling equity and bond fundraising. Alibaba recently raised $3.2 billion via convertible bonds, while Tencent tapped into the dim sum bond market for the first time in four years.
Valuations Still Attractive Compared to the U.S.
The Hang Seng Tech Index trades at 20.5x forward earnings, lower than its five-year average (23.3x) and well below the Nasdaq 100’s 27x multiple. With AI momentum accelerating, Chinese stocks may look undervalued compared to U.S. tech counterparts, making them attractive to global investors seeking exposure at cheaper valuations.
Positive Signals for Investors
Several factors are fueling optimism:
- Improved U.S.-China relations – President Donald Trump is set to meet Xi Jinping, while both governments reached a framework deal on TikTok’s operations in the U.S.
- Domestic innovation – State-owned China Unicom signed AI chip deployment contracts with Alibaba’s T-Head unit, signaling strong state support for local tech.
- Analyst upgrades – Goldman Sachs raised its price target on Alibaba, JPMorgan upgraded CATL, and Arete Research turned bullish on Baidu’s chip business.
FAQs (FAQ Schema Ready)
Q1: Why are China tech stocks rising in 2025?
A1: Renewed optimism in artificial intelligence, easing U.S.-China tensions, and increased capital spending by companies like Alibaba, Baidu, and JD.com are fueling the rally.
Q2: What is the Hang Seng Tech Index?
A2: It’s a benchmark tracking major Chinese tech companies listed in Hong Kong, including Alibaba, Tencent, JD.com, and Baidu.
Q3: How much are Chinese tech firms investing in AI?
A3: Capital spending is expected to jump from $13 billion in 2023 to $32 billion by 2025, according to Bloomberg Intelligence.
Q4: Are Chinese tech stocks undervalued compared to U.S. firms?
A4: Yes, the Hang Seng Tech Index trades at around 20.5x forward earnings, lower than the Nasdaq 100’s 27x, suggesting potential upside.
Q5: Which Chinese tech stocks are leading the AI boom?
A5: Baidu, Alibaba, SMIC, Tencent, and JD.com are at the forefront, with aggressive investments in AI chips, cloud computing, and autonomous driving.
Conclusion
The AI boom has breathed new life into China’s tech sector, sending the Hang Seng Tech Index to a four-year high. With valuations still attractive and companies ramping up investments, investors are taking a fresh look at Chinese technology stocks. If U.S.-China relations continue to improve and AI adoption accelerates, the rally may have much more room to run.
👉 What’s your take on China’s AI-driven stock market surge? Share your thoughts in the comments below!