DeepSeek Fever Fuels Patriotic Bets On Chinese AI Stocks

DeepSeek's affordable model increases hope for wolvesbaneuo.com China AI transformation


DeepSeek stirs nationalistic fever amid Sino-U.S. competition


AI-related stocks in China and Hong Kong rise


By Samuel Shen and photorum.eclat-mauve.fr Jiaxing Li


SHANGHAI/HONGKONG, Feb 6 (Reuters) - Chinese financiers are hurrying into AI-related stocks, betting the expert system advance of home-grown startup DeepSeek will lead to a boom in the sector historydb.date and provide the initiative to China in a magnifying Sino-U.S. innovation war.


Feverish purchasing has pumped up shares of Chinese chipmakers, software designers and data centre operators amid patriotic calls for an upward repricing of Chinese possessions as U.S. President Donald Trump recharges a trade war with fresh tariffs.


"DeepSeek's breakthrough shows Chinese engineers are creative and capable of innovations that can take on Silicon Valley," said China Europe Capital Chairman Abraham Zhang. "It has likewise stirred nationalistic fever in capital markets."


DeepSeek surprised Silicon Valley and rocked Wall Street late last month with the statement of a competitive large language design that was seemingly less expensive to establish than those of big-spending U.S. leaders such as OpenAI and Meta.


The event was explained as a watershed moment by Huaxi Securities and has actually because seen money gushing into AI-related stocks in mainland China and Hong Kong.


The Hang Seng AI Index has actually jumped more than 5% this week while indices tracking chipmakers and IT companies rose more than 11%, helping steady the Hong Kong market as the U.S. added a 10% tariff to Chinese imports.


On the mainland, investors returning from a week-long Lunar New Year holiday on Wednesday also stacked into the tech sector, enhancing shares of firms in AI, semiconductors, wiki.asexuality.org huge information and robotics.


"2025 will witness a surge of AI applications," said Zhou Yingbo, head of financial investment at Futures Vessel Capital.


"We're extremely positive about chances produced by this revolution," Zhou said, anticipating extensive adoption of both AI hardware and software by customers and services alike.


Likely recipients include Nancal Technology, Suzhou MedicalSystem Technology, Doctorglasses Chain, Bestechnic Shanghai and Ucap Cloud Details Technology, Huaxi Securities said.


The DeepSeek development highlights how the U.S. effort to slow China's technological development "has backfired, instead speeding up Chinese AI innovation," TF Securities said in a client note. It required a repricing of Chinese technology stocks which have underperformed U.S. peers recently amid increased regulative scrutiny and geopolitical tension.


The introduction of DeepSeek could trigger even tighter U.S. innovation export constraints however that will just invite more federal government support and forum.batman.gainedge.org turbo-charge development, the brokerage said.


Goldman Sachs expects Chinese advancements in AI development and application "could materially change" the stock market trajectory.


The Wall Street bank estimates AI-enabled effectiveness enhancement could increase profits by 2% for Chinese equities, while brighter development prospects might cause a 20% appraisal uplift for Chinese companies, narrowing the gap with U.S. peers.


China's "difficult tech" stocks trade at a price representing 23.6 times revenues, while "soft tech" shares trade at 13.9. The price-to-earnings ratio of the most significant U.S. tech stocks, the so-called "Mag 7", is 31, revealed the Goldman report dated Feb 4.


DeepSeek has created such a buzz that Chinese companies up and down the AI value chain, from chipmakers to cloud provider are exploring possibilities with the startup's low-priced services, including heavyweights such as Huawei Technologies, Alibaba and Baidu.


Yi Xiangjun, partner of Shenzhen Black Stone Asset Management, said he is "all in" China's AI and tech stocks, wagering big, effective companies will emerge in what he called an epoch-making transformation.


However, wiki.vst.hs-furtwangen.de Wang Zhuo, partner of Shanghai Zhuozhu Investment Management, was more cautious.


"Many business are still far method from generating make money from AI ... As a value investor, I do not feel confident putting money into these stocks." (Reporting by Samuel Shen and Jiaxing Li; Editing by Vidya Ranganathan and Christopher Cushing)