Goldman Sachs: The performance of Hong Kong software technology stocks may improve in the second half of the year, and we continue to maintain an overweight position in A-shares.

Goldman Sachs said that their models show that the performance of H-share software stocks may improve in the coming months, and they are expected to narrow the gap with A-share technology companies in terms of fundamentals, valuation, and liquidity. Overall, they do not agree with the view that Chinese AI stocks as a whole are in a bubble, but they have observed signs of localized overheating in the AI investment sector, mainly concentrated in the semiconductor sector and some representative A-share "hard technology" stocks. For the second half of the year, they are maintaining an overweight position in A-shares, mainly due to its stronger profit momentum in the cyclical dimension and the diversification value that has not been fully appreciated by international investors. They also recommend gradually increasing holdings of some large Hong Kong-listed internet companies.