DeepSeek Fever Fuels Patriotic Bets on Chinese aI Stocks

DeepSeek’s affordable design enhances hope for China AI transformation

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

AI-related stocks in China and Hong Kong surge

By Samuel Shen and Jiaxing Li

SHANGHAI/HONGKONG, forum.pinoo.com.tr Feb 6 (Reuters) – Chinese financiers are rushing into AI-related stocks, betting the artificial intelligence advance of home-grown startup DeepSeek will result in a boom in the sector and provide the effort to China in a heightening Sino-U.S. innovation war.

Feverish buying has pumped up shares of Chinese chipmakers, software application designers and information centre operators amid patriotic require an upward repricing of Chinese assets as U.S. President Donald Trump charges a trade war with fresh tariffs.

„DeepSeek’s development shows Chinese engineers are innovative and efficient in innovations that can contend with Silicon Valley,“ said China Europe Capital Chairman Abraham Zhang. „It has actually likewise stirred nationalistic fever in capital markets.“

DeepSeek stunned Silicon Valley and rocked Wall Street late last month with the announcement of a competitive large language design that was ostensibly cheaper to develop than those of big-spending U.S. leaders such as OpenAI and Meta.

The occasion was explained as a watershed moment by Huaxi Securities experts and has given that seen money gushing into AI-related stocks in mainland China and Hong Kong.

The Hang Seng AI Index has leapt more than 5% this week while indices tracking chipmakers and IT firms surged more than 11%, assisting constant the Hong Kong market as the U.S. included a 10% tariff to Chinese imports.

On the mainland, financiers returning from a week-long Lunar New Year vacation on Wednesday also stacked into the tech sector, boosting shares of firms in AI, semiconductors, wiki.snooze-hotelsoftware.de huge data and robotics.

„2025 will witness an explosion of AI applications,“ said Zhou Yingbo, head of investment at Futures Vessel Capital.

„We’re very optimistic about chances developed by this revolution,“ Zhou said, expecting widespread adoption of both AI hardware and software application by consumers and businesses alike.

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

The DeepSeek advancement illustrates how the U.S. effort to slow China’s technological development „has backfired, instead accelerating Chinese AI development,“ TF Securities said in a client note. It called for a repricing of Chinese technology stocks which have underperformed U.S. peers recently in the middle of increased regulative analysis and geopolitical tension.

The development of DeepSeek might trigger even tighter U.S. innovation export constraints but that will only invite more federal government assistance and turbo-charge development, the brokerage said.

Goldman Sachs expects Chinese advancements in AI advancement and application „could materially change“ the stock exchange trajectory.

The bank approximates AI-enabled efficiency enhancement might increase earnings by 2% for Chinese equities, while brighter growth potential customers might lead to a 20% appraisal uplift for Chinese companies, narrowing the gap with U.S. peers.

China’s „difficult tech“ stocks trade at a cost representing 23.6 times revenues, while „soft tech“ shares trade at 13.9. The price-to-earnings ratio of the biggest U.S. tech stocks, the so-called „Mag 7“, is 31, showed the Goldman report dated Feb 4.

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

Yi Xiangjun, partner of Shenzhen Black Stone Asset Management, bybio.co said he is „all in“ China’s AI and tech stocks, betting large, successful business will emerge in what he called an epoch-making transformation.

However, Wang Zhuo, partner of Shanghai Zhuozhu Investment Management, was more cautious.

„Many business are still far way from generating profit from AI … As a worth investor, I do not feel confident putting cash into these stocks.“ (Reporting by Samuel Shen and Jiaxing Li; Editing by Vidya Ranganathan and Christopher Cushing)