AI Momentum Powers Longest Winning Streak for Chinese Tech Stocks

Chinese technology shares continued their rally on Thursday, lifted by strong investor appetite for the nation’s artificial intelligence sector. The Hang Seng Tech Index advanced 0.9%, with JD.com and Xiaomi leading the gains. The gauge, which tracks Hong Kong-listed Chinese tech firms, is now on course for an eighth straight weekly rise — its longest winning streak since launch. The momentum reflects how quickly sentiment has shifted, as just a year ago the industry was under pressure from regulatory tightening and weaker economic growth.

Investor confidence was further supported by fresh policy backing from Beijing, as well as Alibaba’s announcement to boost AI investment and expand collaboration with Nvidia. These factors have driven the index to a roughly 44% increase so far this year. Analysts noted that optimism around AI, along with reduced concerns over aggressive competition in food delivery and e-commerce, has added fuel to the rally.

JD.com jumped 3.5% after outlining plans to invest heavily over the next three years to create a trillion-yuan AI ecosystem. Xiaomi climbed more than 4% ahead of the launch of its Xiaomi 17 smartphone, positioned against Apple’s iPhone 17. Baidu also advanced over 2% after securing approval for autonomous driving trials in Dubai.

Despite the enthusiasm, technical indicators suggest the rally may be overheating. Bloomberg data showed the Hang Seng Tech Index has moved into overbought territory based on the 14-day relative strength index, while its valuation has stretched to about 21.5 times forward earnings, above the three-year average of 18.