Tech giants in China sold off alongside their U.S. peers. How to play it
(CNBC): Tech stocks in China take a hit amid market volatility, with different factors at play compared to the U.S.
Amid recent market turbulence, Chinese tech stocks experienced a downturn due to sentiment spillover and portfolio adjustments, contrasting with the U.S. decline driven by earnings misses. Despite the sell-off, long-term prospects for the chip and AI sectors in China remain strong. Valuations in China’s tech sector are seen as relatively low, with significant room for growth, especially in AI and chip-related areas. Mainland investors are showing confidence in tech giants like Tencent and Alibaba, despite recent losses in Hong Kong trading. The analysis points to a more positive outlook for China’s markets compared to the U.S., with expectations of continued expansion in the digital economy and AI ecosystem. As China and Hong Kong stocks enter 2026 with low expectations, valuations reflect substantial pessimism, offering potential opportunities for investors. The landscape of Chinese AI development differs from that in the U.S., emphasizing unique applications and lower costs. Recent partnerships and developments in Chinese tech companies underscore a shift towards home-grown technology and innovation.
