Hong Kong AI stocks rally with Zhipu surging 15%

A rally in Chinese AI application developers, with Zhipu climbing 15 percent, counters a broader tech sell-off in US markets.

Hong Kong-listed AI application stocks surged on Monday, with Zhipu AI rocketing over 15 percent, as capital rotates into Chinese tech leaders while a US-based AI rally shows signs of fatigue.

The rally saw Zhipu (02513.HK) close Monday's session up more than 15 percent. Peers also jumped, with MINIMAX-W (00100.HK) gaining 11 percent and Xun策 (03317.HK) advancing 8 percent. The move contrasted sharply with sentiment in US markets, where the tech-heavy Nasdaq composite fell 0.7 percent from its record high.

The divergence highlights a potential shift in investor focus. While US AI darlings like Intel and Micron Technology saw declines of 6.8 percent and 3.6 percent respectively amid inflation concerns, investors in Hong Kong are buying into China's push for technological self-sufficiency. This comes just days after the tech-heavy ChiNext Index rallied on strong signals from Beijing that it is committed to bolstering its domestic chip industry.

The gains in Hong Kong suggest growing investor confidence in the long-term viability of China's AI sector, even as broader market headwinds persist. Rising oil prices, driven by geopolitical tensions, have worsened inflation and increased expectations that the Federal Reserve will maintain higher interest rates, putting pressure on US growth stocks. According to Brian Jacobsen, chief economic strategist at Annex Wealth Management, tariffs and bad weather are also contributing to higher prices. For investors seeking exposure to the artificial intelligence boom, the rally in Chinese application developers offers a potential alternative to the increasingly crowded and volatile US AI trade.

This article is for informational purposes only and does not constitute investment advice.