The rise of China's tech stocks "Seven Giants": Who can replicate the capital myth of the US stock market's "Magnificent 7"?

Since the emergence of DeepSeek, the global stock market has experienced significant fluctuations, with the technology sector, especially Chinese tech stocks, performing particularly well. This groundbreaking AI technology achievement has not only made significant leaps on the technical level but has also stirred up huge waves in the business and capital markets, becoming an important catalyst for the rise of Chinese tech stocks.

For many years, the American tech "Magnificent 7," represented by Apple, Microsoft, and Nvidia, has dominated the global technology industry chain's rules and value distribution through its dominance in hardware, software, AI, and ecosystems. The core logic behind this is: generational technological leadership + scalable commercial implementation + ecosystem construction. For example, Nvidia defines the AI era with computing power, Tesla reconstructs the automotive industry with intelligence, and Microsoft and Google reshape enterprise productivity with cloud and AI.

However, with breakthroughs in foundational AI technologies like DeepSeek, the Chinese tech industry is replicating this logic, gradually breaking down the dual barriers of hardware and algorithms.

Recently, Huatai Securities proposed for the first time the "Seven Giants of Chinese Tech Stocks" in its latest report—Xiaomi, Lenovo, BYD, SMIC, Alibaba, Tencent, and Meituan. These seven companies cover core areas such as hardware manufacturing, cloud computing, semiconductors, smart terminals, and local living.

The Underlying Logic of the "Seven Giants of Chinese Tech Stocks": Hard Technology + Scenario-based AI

A close examination of these seven companies reveals their common characteristics: increased technological autonomy, accelerated globalization, and AI-driven business transformation. While the total market capitalization of this Chinese version of the combination still lags behind that of the US "Magnificent 7," its incremental potential in AI applications, electric vehicles, and semiconductor localization may become a new logic for global capital to bet on Chinese technology.

The success of the American "Magnificent 7" is built on "defining rights of underlying architecture"—from Nvidia's GPUs to Microsoft's cloud operating systems, all dominate the global market with technological standards. In contrast, the breakthrough path of Chinese tech giants emphasizes a dual-driven approach of "hard technology breakthroughs + scenario-based implementation":

1. Hardware Breakthrough: SMIC's mature process capacity, BYD's vertical integration capabilities in electric vehicles, and Xiaomi's smart ecosystem are reshaping the geographical distribution of the global supply chain.

2. AI Scenario-based: Tencent's social AI assistant, Meituan's unmanned delivery, and Lenovo's AI PCs are transforming large model technologies into cost-reducing and efficiency-enhancing productivity tools.

3. Data and Ecological Barriers: Alibaba Cloud's Tongyi Qianwen open-source ecosystem and Tencent's WeChat social network form a localized data moat.

This "technology-scenario-ecosystem" closed loop may enable Chinese tech giants to achieve a curve-over-take in the AI era

Lenovo: The Undervalued "Edge AI Revolutionary" and "AI Enabler"

Among the "Seven Giants of Chinese Technology Stocks" listed by Huatai Securities, Lenovo (00992) has the most unique positioning—it is not only the world's largest hardware giant in terms of PC shipments but also an important leader in AI infrastructure and solution services. However, based on its current valuation, Lenovo may be the "most undervalued AI enabler."

Currently, Lenovo's price-to-earnings ratio is only 12.7 (2025E), significantly lower than global AI hardware leader NVIDIA (29.5) and others. Its undervaluation stems from the market still viewing it as a "traditional PC manufacturer," while overlooking two major potentials: the certainty of the AI replacement wave and the incremental market brought by model lightweighting.

The recently emerged model DeepSeek R1, with higher inference efficiency and lower computing cost, accelerates edge intelligence while also speeding up the deployment demand for artificial intelligence in enterprises. This aligns with Lenovo Group's hybrid AI strategy proposed in 2023. Lenovo is expected to leverage hybrid AI to bridge the intelligent upgrade needs of individuals and enterprises, becoming a key driver of the democratization wave of AI.

Huatai Securities believes that after the launch of DeepSeek, the difficulty and cost for enterprises or individuals to build AI are expected to decrease, and Lenovo, as a core company for AI edge deployment, is likely to benefit. The DeepSeek-R1 model is not yet smoothly deployable on ordinary laptops, but it can run smoothly on more powerful PCs (for example, a PC equipped with an Nvidia RTX 6000 (48GB VRAM) can run a large model with 671 billion parameters). If vertical AI enters thousands of industries by 2025, a large number of researchers will deploy models on PCs for development, potentially leading to increased demand for high-performance computers. According to IDC, Lenovo's market share is expected to be 23.5% in 2024, making it the world's largest in PC shipments, likely benefiting from the trend of edge deployment.

The commercialization of AI large models like DeepSeek is expected to drive enterprises to increase IT investment, leading to steady growth in the shipment volume of Lenovo's enterprise-level business products such as servers and storage. Edge AI inference does not require top-tier computing power; Lenovo's mature supply chain and cost control capabilities can quickly cover the long-tail demand of small and medium-sized enterprises.

According to Huatai Securities' forecast, Lenovo's enterprise-level business revenue growth may exceed 15% in 2025, becoming the core engine of its profit growth.

Looking ahead to 2025, Lenovo's valuation logic may need to shift from "hardware manufacturer" to "king of AI edge."

New Order in the AI Market

The success of the "Magnificent 7" in the United States stems from a positive cycle of "defining technology standards—monopolizing the global market—capital feeding back into R&D." The rise of China's "Seven Giants" marks another possibility—reconstructing the global technology power map in the AI era through local supply chain advantages and scenario-based innovation   

The story of Lenovo reveals a key trend: the future tech giants may not necessarily emerge from the laboratories of Silicon Valley, but could also come from factories in Shenzhen, cloud computing data centers in Hangzhou, or electric vehicle production lines in Hefei. When hard technology deeply integrates with scenario-based AI, China's "seven giants" in tech stocks may write a capital myth belonging to the East