Deepseek brings hope to the Renaissance with China’s high-tech mega cup
(Bloomberg) – The rise of Chinese AI startup DeepSeek has forced investors to reevaluate major internet companies in the country and the possibility of leveraging artificial intelligence that has boosted global peers.
Most of them read from Bloomberg
Marketwatchers are increasingly promoting how AI models become game-changers for Chinese tech companies and their stocks. Already, Alibaba Group Holding Ltd. stocks have surged over such hype, and tech stock measures entered the bull market on Friday.
“Refreshed attention could shift investors’ focus from “thinking about risk” to “thinking about potential” when looking at China’s large-scale internet names,” says Gam Investment Management in Zurich. said Jian Shi Cortesi, portfolio manager at “This is positive, especially given that there is a big rating for these names compared to our peers,” she added.
Future results seasons may provide stock catalysts in the form of management comments on the progress of AI models and demand for cloud services. Meanwhile, options traders are boosting China’s technology betting, and stocks remain historically cheap.
The Hang Seng Tech Index entered the bull market after a 9% profit last week. Still, the gauge of Chinese technology stocks listed in Hong Kong trades below 17 times, estimated at less than 27 times the NASDAQ 100, and even a 25 times five-year average.
China’s tech stock multiples are not only weak in demand among domestic consumers, but also suffer from intense competition in e-commerce and cloud businesses. This is because geopolitical tensions with the US have reduced the country’s global appetite for stocks.
“The lack of interest and liquidity among foreign investors in the market was one of the reasons that it was a trap of value,” said Alex Au, managing director of Alphalex Capital Management Hk Ltd. It should help narrow the evaluation gap. ”
The excitement has been extended beyond the startup level, with Alibaba unveiling the latest version of its AI model just days after Deepseek’s release, promoting even better results. This led to a 13% increase in Hong Kong listed stocks last week. Competing products from other majors include Hunyuan from Tencent Holdings Ltd., Ernie Bot from Baidu Inc., and Doubao from Bytedance Ltd.
The latest wave of services will need to accelerate AI adoption by businesses as well as consumers, while also reducing the costs of hyperscalers. It also means cloud service providers like Alibaba and Tencent, given that users rely on cloud computing to run their AI infrastructure.
“The much cheaper and more capable model introduced by DeepSeek should help democratize China’s AI and encourage use and spending,” says the AU of Alphalex Capital. “I think cloud operators like Alibaba will be the main beneficiaries.”
The growth of Chinese hyperscaler’s cloud business has so far slowed the growth of its major US peers. Analysts said cloud revenues for the December quarter increased 9.7% from a year ago and 7.6% at Baidu, compared to 19% at Amazon.com Inc. and 31% at Microsoft Corp.
China’s tech stocks are not only facing pressure from US tariffs on e-commerce freight, but also in Washington’s efforts to limit access to the Asian nation’s most advanced chips. But DeepSeek helped to show that focus isn’t always on the highest level of technology.
Options bets for the Hang Seng Tech Index are on the rise, touching the highest level since Friday early October. About 6,500 bullish contracts were traded that day, almost twice the number of puts. The June 6,000 calls were most active with a strike price 16% above the end of Friday.
“There have been particularly disappointing investment stories for Tencent and Alibaba over the years,” said Richard Close, portfolio manager at Janus Henderson. “We’re looking for a new story to get excited. Now we have it. This is actually a very reliable player in AI.”
The day’s technical chart
Meta Platforms Inc. has come together for a record 15 consecutive sessions as investors cheer on the social media giant’s artificial intelligence strategy. The Facebook owner’s shares were scheduled to extend their record winning streak on Monday.
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Monday’s revenue
Before sale
Post Market
Semilatex
SPS Commerce
Amkor Technology
Axcelis Technologies
Harmonics
– Support from Winnie Sue, Henry Len, Cecil Vannucci, Sablatt Patnaik and David Watkins.
(Updated in the chart for that day, revenue deadline section)
