A rally in artificial intelligence companies lifted a key group of Hong Kong-listed technology stocks on Monday, with Zhipu surging nearly 30 percent and Han's CNC climbing more than 25 percent on renewed investor optimism in the sector.
The gains reflect a burst of confidence in China's AI champions, fueled by reports of significant new capital entering the space. The rally stands in contrast to broader Asian market weakness, where geopolitical tensions and inflation concerns have weighed on sentiment.
The primary driver for the surge was a report that AI startup DeepSeek is seeking to raise up to 50 billion yuan ($7.35 billion) in its first funding round, which would be the largest ever for a Chinese AI company. Other AI-related stocks also posted strong gains, with MiniMax rising 15 percent and Montage Technology adding 14 percent to reach a new high.
This influx of capital is seen as a critical step for China's ambitions to compete with the United States in the AI sector, especially as tech giants like Alibaba and Tencent Holdings line up to invest in promising startups like DeepSeek. The move signals that investors are willing to look past recent weak share performance and bet on the long-term growth of China's domestic AI capabilities.
The positive sentiment was not limited to a few names. Major Chinese chipmakers also advanced, tracking gains in their global peers after the Philadelphia Semiconductor Index hit a record high on Friday. Semiconductor Manufacturing International Corp (SMIC), China's largest chipmaker, jumped 5.6 percent in Hong Kong, while peer Hua Hong Semiconductor also rose.
On the mainland, Hygon Information Technology surged 6.4 percent, and NAURA Technology Group added 7.2 percent. This broad-based rally in the semiconductor space underscores the market's conviction that AI-driven demand will be a significant growth driver for the entire technology supply chain.
However, the AI-focused rally occurred against a backdrop of caution in the wider Asian markets. Stocks in Hong Kong, Shanghai, and Sydney fell as traders digested a lack of progress in US-Iran peace talks and the impact of spiraling energy costs. The conflict in the Middle East has nearly halted traffic through the Strait of Hormuz, through which a fifth of the world's oil supplies pass, stoking inflation fears.
The weak performance of Chinese tech giants Alibaba and Tencent, both of which are investing heavily in AI but have struggled to keep pace with US competitors, has also been a headwind. The upcoming earnings reports from these two firms will be closely watched for signs of progress in their AI monetization strategies.
For investors, the divergence between the targeted rally in AI-concept stocks and the broader market malaise presents a complex picture. While the potential for China's AI sector is significant, as evidenced by the DeepSeek funding news, the industry remains vulnerable to geopolitical risks and intense competition. The current rally shows high investor appetite for pure-play AI stories, even as the path to profitability for larger, more diversified tech firms remains a key question.
This article is for informational purposes only and does not constitute investment advice.
