Foreign investment dominates, DeepSeek empowers, and Chinese stocks rise strongly

Source: Visual China

Blue Whale News, February 11 (Reporter Zhai Zhichao)On February 10, local time, the three major U.S. stock indexes collectively rose. The Dow Jones Industrial Average, Nasdaq Index, and S & P 500 Index closed up 0.38%, 0.98%, and 0.67% respectively.

Among them,The Nasdaq China Golden Dragon Index surged by 2.61%, setting a closing high in four months. China stocks became the most eye-catching presence in the U.S. stock market and outperformed the U.S. stock market.Judging from the performance of individual stocks, hot Chinese stocks showed a general upward trend. Alibaba rose 7.55%, Baidu rose more than 5%, Jingdong rose nearly 5%, NIO rose more than 2%, and Pinduo and Futu Holdings rose nearly 2%.

Chinese stocks surged sharply. Outside analysis believes that some factors may be that foreign institutions are driving more China’s assets.

Deutsche Bank made it clear that the performance of Chinese assets will outperform other regions in 2025; Bank of America strategist team recommended long Chinese stocks; according to the 13F disclosure document of billionaire investor David Tepper’s Appaloosa LP, in the fourth quarter of 2024, The hedge fund comprehensively increased its holdings of Chinese stocks and Chinese equity funds. As early as the end of September 2024, David Tepper said that after the Federal Reserve cut interest rates, one of the major decisions he made was to purchase all China related stocks. One of the important reasons was that China’s easing policies exceeded expectations.

Goldman Sachs believes that the rise of DeepSeek will bring valuation restructuring to Chinese stocks. Goldman Sachs analysis pointed out that DeepSeek promotes the transfer of the AI industry’s development from the hardware infrastructure layer to the software application layer, providing new opportunities for the diversified development of the global market, especially for China Technology Stocks. Therefore, Goldman Sachs recommends over-allocating Chinese technology stocks, especially companies with innovative capabilities and market advantages at the AI application level. In addition, Goldman Sachs also said that after revaluation, technology stocks have at least a 20% chance of earnings.

It is understood that in the field of artificial intelligence, large models are one of the core competencies, and DeepSeek was born. With its excellent large model capabilities and low prices, it quickly attracted the attention of major Internet, mobile phones, operators and other companies. It has been embedded in its own products one after another, and its commercialization prospects are very broad.

Take Alibaba’s Alibaba Cloud Qwen2.5-Max model as an example, which is comparable to DeepSeek in terms of capabilities.Due to the explosion of DeepSeek, the market began to re-examine the value of domestic cloud computing and large model-related companies and gave them higher valuation expectations.

Data shows that since the beginning of this year, Alibaba’s Hong Kong stocks and U.S. stocks have risen 28% and 32% respectively.Alibaba’s surge has also led to a continuous increase in the net value of its China-China Internet theme funds.Take the China Internet ETF (513220), whose proportion exceeds 15% as an example. It has increased by more than 20% since January 14, and rose again by more than 2% in intraday trading on February 10.

Not only Alibaba, Xiaomi and other companies may also benefit from this wave of market. Although there is no direct link between the rise in Xiaomi’s share price and DeepSeek,However, in the context of reshaping the overall valuation of the technology industry, as a company that has an important position in the fields of smartphones, smart homes and other fields and is actively deploying technology research and development, Xiaomi may also enjoy the recovery of market sentiment and the improvement of industry valuations. dividends.Data shows that since the beginning of this year, Xiaomi Group’s share price has risen by more than 26%.

“Previously, China’s technology stocks were affected by many factors in the international market, and their valuations were underestimated to a certain extent. The emergence of DeepSeek has not only narrowed the technological gap between China and the United States in the field of artificial intelligence, but also reduced the cost of computing power, which is expected to reshape the competitive landscape of the global AI industry. This allowed international investors to see the potential and innovative capabilities of China technology companies and began to re-examine the investment value of China technology stocks. rdquo;

“From a valuation perspective, after Alibaba’s recent continuous gains, the current PE (TTM) is only about 20 times, and the overall PE (TTM) of the global Internet in China is also about 28 times. Compared with the Nasdaq 100 Index’s P/E ratio of 36.40 times, it is still at a low valuation level, which means that there may be room for valuation improvement in the future. rdquo; The above-mentioned person added.

An investor who focuses on investing in Hong Kong and U.S. stocks told Blue Whale News that the reshaping of technology valuation triggered by DeepSeek is both an opportunity and a challenge. The China Internet ETF brings together leading Internet companies around the world, and has a high concentration of the top ten, which can be used as one of the tools for laying out subsequent markets. But at the same time, market weakness and uncertainty in the past few years still exist, and it remains to be seen whether DeepSeek can drive a sustained reversal in the entire industry. rdquo;