Wall Street's leading investment banks are turning bullish on China's A-share market amid a surge in artificial intelligence innovation. Global powerhouses such as JPMorgan, Goldman Sachs, and Morgan Stanley are driving renewed investor optimism, citing robust market fundamentals and transformative AI technologies.
JPMorgan underscored four key factors that are lifting Chinese equities: relative earnings growth across Asia, AI-driven cost efficiencies (with innovations led by DeepSeek), stabilization in the real estate sector, and improved liquidity in A-share allocations. Tai Hui, chief market strategist for the Asia-Pacific region at JPMorgan Asset Management, noted that the nation’s AI sector is expected to power further market optimism through expanded corporate partnerships.
Goldman Sachs reinforced this upbeat sentiment in its report, "Global Marketing Feedback: China is Back." The report highlighted that investors are remaining calm over US tariff threats while eyeing AI as a potential game-changer—projecting a boost in earnings per share by 2.5 percent annually over the next decade and attracting over $200 billion in capital inflows. Interest in Chinese equities is reportedly near its highest since the market's historic peak in early 2021.
Adding to the positive outlook, Morgan Stanley forecasted greater exposure to technology and internet sectors via the Hong Kong market, facilitated by Stock Connect. The firm raised its year-end target for Hong Kong's Hang Seng Index, indicating a nine percent upside potential, along with a similar increase for the MSCI China target.
These bullish calls dovetail with the broader ambitions outlined in China's Government Work Report. The report emphasized the "AI Plus" initiative, aiming to blend digital technologies with the nation's manufacturing and market strengths. With nearly 200 generative AI models registered by the end of 2024 and more than 600 million registered users, the Chinese market is poised for a tech-driven renaissance that is capturing global attention.
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Wall Street banks turn bullish on China's A-Share market amid AI push
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