Goldman Sachs: Staying overweight on A-shares, advising to focus on high-quality internet leaders in Hong Kong stocks.

Goldman Sachs's latest research report maintains its overweight position on A shares. This year, the market has seen extreme differentiation, with A-shares in the hard technology sector significantly outperforming Hong Kong-listed internet companies. Goldman Sachs believes that there is no overall bubble in the AI sector of A-shares, but valuations in subsectors such as semiconductors are high, and there is a need to be cautious about the high concentration of trading risks. Goldman Sachs points out that there may be a short-term rebound in Hong Kong-listed internet companies, as current stock prices have already fully absorbed pessimistic expectations of AI investment losses and pressure on core business, with subsidies shrinking and cloud and AI applications accelerating monetization. In the second and third quarters, it is expected that profit will turn a corner, and it is recommended to gradually build positions in high-quality internet leading companies listed in Hong Kong. In terms of fund allocation, hedge funds are heavily invested in the South Korean and Taiwanese markets, while emerging market funds are beginning to overweight China.