Goldman Sachs’ chief China equity strategist believes the AI-led stock rally in China isn’t a bubble. Chinese tech firms focusing on AI applications have room to grow valuations and earnings. Chinese companies are trading at more reasonable valuations compared to US counterparts, with significant potential for growth in AI monetization. China’s AI investment cycle lags the US by 18 months, offering more room for earnings and revenue growth. The country’s five-year plan emphasizes AI development, with predictions of a 30% upside for Chinese stocks by 2027. Earnings growth in Chinese companies will benefit from AI investments, anti-involution policies, GDP growth, and global expansion. Strong money flows from domestic and international investors are expected to fuel a durable bull run in China. Global investors are increasingly open to exploring opportunities in China, especially in technology and AI sectors. Despite political narratives, emerging market investors are actively pursuing Chinese assets for long-term growth and diversification.

Read more at Yahoo Finance: China’s AI stock rally has room to run as valuations lag US giants, Goldman Sachs says