Al boom is driving stock market rally in China, too

Interest in artificial intelligence generates huge gains for Chinese tech stocks

- MEAGHAN TOBIN

Last year, investors in Chinese stocks lurched between euphoria and disappointment as the market swerved in response to the government's attempts to kick-start growth in China's sluggish economy.

Now, China's stock markets are in the midst of another bullish run. Analysts and investors say that this time, rather than being driven mainly by policy changes, the moves are linked to a trend that is also pushing up stocks in the United States and elsewhere: artificial intelligence.

“There has been a resetting of expectations around what the government will and won't do to stimulate the economy,” said Eric Wong, the founder of Stillpoint Investments, a hedge fund. “That has enabled people to be more comfortable to put money into parts of the economy where they think there is outsized growth.”

The share prices of companies that play a major role in China’s AI industry have grown by triple digits this year. Alibaba, which makes widely used open source AI systems, has gained more than 120% this year. Semiconductor Manufacturing International Corp, China's most advanced chip-maker, is up even more, around 180%.

Other Chinese tech stocks, including Baidu, Tencent and Xiaomi, are up around 60% this year.

By comparison, Nvidia, the US chipmaker whose central role in the AI boom has made it the most valuable public company in the world, is up about 40% this year.