Chinese technology stocks listed in Hong Kong climbed to their highest level in nearly four years on Wednesday, as optimism over artificial intelligence fueled investor demand, Bloomberg reported.
The Hang Seng Tech Index rose as much as 3.5%, reaching its strongest level since November 2021. Search engine giant Baidu Inc. led the rally with a 16% surge, while other heavyweights including JD.com Inc., Meituan, and Alibaba Group Holding Ltd. also posted strong gains in morning trading.
The index is now on track for its seventh consecutive week of gains, supported by easing tensions between China and the U.S. as well as growing confidence in Chinese firms’ big bets on AI. “China tech leaders are visibly re-accelerating AI spend and product rollouts — models, robotaxis, in-house chips — while also proving they can monetize AI faster than many expected,” said Charu Chanana, chief investment strategist at Saxo Markets. “With valuations lagging the U.S., investors are starting to pay attention again.”
Despite the rally, Chinese tech valuations remain below those of their U.S. peers. The Hang Seng Tech Index trades at 20.5 times forward earnings, compared with 27 times for the Nasdaq 100, according to Bloomberg data.
AI Spending Race
China’s biggest internet firms are in the midst of a multibillion-dollar spending spree to advance their AI capabilities. Capital expenditure from companies such as Alibaba, Tencent Holdings Ltd., Baidu, and JD.com is expected to more than double to $32 billion in 2025, up from $13 billion in 2023, Bloomberg Intelligence estimated.
That surge in investment has been mirrored by fundraising in equity and debt markets. Last week, Alibaba raised $3.2 billion in a major convertible bond offering, while Tencent tapped the dim sum bond market on Tuesday with a 9 billion yuan ($1.27 billion) sale — its first such issuance in four years.
Investor sentiment also got a boost after state broadcaster CCTV reported that China Unicom’s Sanjiangyuan data center signed contracts to deploy AI chips from domestic players including Alibaba’s semiconductor unit T-Head. The announcement came during Chinese Premier Li Qiang’s visit to the facility in Qinghai province earlier this week.
On the geopolitical front, hopes of improved ties between Beijing and Washington added momentum. U.S. President Donald Trump said he would speak with Chinese leader Xi Jinping on Friday, while officials from both nations have reached a framework deal to allow TikTok to continue operating in the U.S.
