"East rises, West falls" trend accelerates, China's "Seven Giants of Technology" overpowering US stock market "Seven Giants."

This year, Chinese tech giants have launched a $439 billion market value surge, leaving their once dominant American counterparts far behind. Many investors believe that this outstanding performance still has room for further improvement. France's Industrial Bank (Societe Generale SA) refers to the seven Chinese tech giants, including Alibaba Group Holding Limited Sponsored ADR and TENCENT, as the "Seven Giants." This basket of stocks, which is weighted equally, has risen by over 40% this year. In contrast, the American "Seven Giants" index has fallen by about 10%, dragging the Nasdaq 100 index into a correction. This is a sharp reversal of fortune in the stock market that almost no one on Wall Street anticipated. In early 2025, the Nasdaq index was consistently hitting new highs, while the Chinese stock market was still struggling. However, almost overnight, the introduction of DeepSeek overturned previous perceptions, and the market began to realize that China might not need many years to catch up with the United States in the field of artificial intelligence. Since then, Chinese tech stocks have been surging, and even those who were skeptical for a long time have turned from pessimism to optimism. This week, with the Chinese government's plan to increase support for tech companies and the introduction of a series of new artificial intelligence tools by companies like Alibaba Group Holding Limited Sponsored ADR, this wave of momentum has been further propelled. Charu Chanana, Chief Investment Strategist at Saxo Markets, said, "The success of DeepSeek and the introduction of a series of artificial intelligence models in China reminds the world that despite U.S. chip export restrictions, China's innovation strength cannot be underestimated. Considering valuation discounts, there is still room for growth in Chinese AI-related stocks." Based on market value and growth trajectory, France's Industrial Bank has listed this portfolio of Chinese companies, which also includes Xiaomi, BYD Company Limited, Semiconductor Manufacturing International Corporation, JD.com, Inc. Sponsored ADR Class A, and NetEase Inc Sponsored ADR. Frank Benzimra, a strategist at French Bank, pointed out in a report on February 28 that this portfolio currently has an expected P/E ratio of 18 times, more than 40% lower than the American "Seven Giants." On Friday, the Hang Seng Tech Index rose by over 1%, with a cumulative increase of about 10% for the week, reaching its highest level since the end of 2021. U.S. vs. China Now, the once underestimated Chinese stocks seem to be developing positively in all aspects, while the U.S. stock market has suffered multiple blows. U.S. President Donald Trump has disrupted the global trade order, and a series of tariff measures have made American companies and consumers anxious, shaking the notion that "the U.S. stock market's rise is unstoppable" derived from the "American exceptionalism" belief. The upward trend of large U.S. tech stocks, led by NVIDIA Corporation (NVDA.US), has been hindered in recent years, and investors have begun to question the justification of its high valuation, demanding higher earnings surprises. Despite the optimism towards China, the unexpected turns in the performance and policies of the Chinese stock market, as well as the increasing political tension under Trump's administration, have kept some investors cautious. Although the Hang Seng Tech Index has risen this year, it is still about 40% lower than its peak in 2021. Its five-year return rate is about 18%, which pales in comparison to the over 130% increase of the Nasdaq 100 index during the same period. However, with growing concerns about the bubble in U.S. stocks, China has become a viable alternative choice for many investors. Vey-Sern Ling, Managing Director at Union Bancaire Privee, said, "The necessary driving factors for Chinese tech stocks to outperform the market are in place, including high-level government support, profit recovery, and the structural growth theme of artificial intelligence. U.S. tech stock valuations have been rising for two consecutive years, and now lower-than-expected earnings and macroeconomic factors are pushing stock prices lower." This, to some extent, "is causing funds to flow from the U.S. to Europe and China".