Despite a hotter-than-expected inflation report this morning, Chinese tech stocks shook off the bad news and marched higher. The beaten-down sector continues to advance since the emergence of China’s DeepSeek artificial intelligence (AI) chatbot.
Shares of the large search and e-commerce company Alibaba (NYSE: BABA) had risen 4.4% as of 11:34 a.m. ET today. Meanwhile, shares of the digital finance company Futu Holdings (NASDAQ: FUTU) had surged 8.4%, and shares of the large tech and videogame company Tencent Holdings (OTC: TCEHY) were up 3.5%.
After January’s inflation data came in above estimates, most major market indexes sold off as investors further doubted whether the Federal Reserve would be able to cut interest rates more this year with inflation still well above the Fed’s preferred 2% target.
The emergence of DeepSeek and the potential for AI language models to be built more efficiently has some investors taking another look at Chinese tech stocks, which have performed well as of late. The Hang Seng Index has rocketed nearly 16% over the last month despite continued struggles in China’s economy from deflationary pressure and an ailing property sector.
“China has established a stronger presence in AI-powered applications,” JPMorgan Chase strategists wrote in a report on Tuesday. “The combination of increasing AI adoption and relatively low valuations positions Chinese tech for potential outperformance.”
Alibaba rose today on media reports that the consumer tech giant Apple has tapped Alibaba to bring more AI features to iPhone users in China. The Information first reported the news. The move will reportedly bring more AI functionality that Chinese users specifically want but also in a way that’s compliant with China’s strict AI doctrine. The move will also likely make the iPhone more competitive against companies like Huawei and Xiaomi. It’s also a testament to Alibaba’s AI capabilities because Apple reportedly considered technology and AI models from several other large Chinese tech companies.
Futu also surged after analysts at Bank of…
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