According to the Zhitong Finance APP, this year, Chinese tech giants have launched a frenzy that has seen a surge in market value of $439 billion, leaving their once-dominant American counterparts far behind. Many investors believe that this outstanding performance still has room for further improvement. Société Générale SA refers to the seven major Chinese tech giants, including Alibaba and Tencent Holdings, as the "Seven Giants." This basket of stocks, compiled on an equal-weight basis, has risen over 40% this year. In contrast, the American "Seven Giants" index has fallen by about 10%, and its sluggish performance has pushed the Nasdaq 100 index toward a correction. This is a dramatic reversal of fortunes in the stock market that few on Wall Street anticipated. At the beginning of 2025, the Nasdaq index was still reaching new highs, while the Chinese stock market was languishing. However, almost overnight, the emergence of DeepSeek disrupted previous perceptions, and the market began to realize that China might not need many years to catch up with the U.S. in the field of artificial intelligence. Since then, Chinese tech stocks have surged, even those who were long skeptical have turned from pessimism to optimism. This week, with the Chinese government's plans to increase support for tech companies and the launch of a series of new AI tools by companies like Alibaba, this wave of growth has been further propelled. Charu Chanana, Chief Investment Strategist at Saxo Markets, stated: "The success of DeepSeek and the launch of a series of AI models in China remind the world that despite the U.S. implementing chip export restrictions, China's innovative strength should not be underestimated. Considering the valuation discount, there is still room for growth in Chinese AI-related stocks." Société Générale has listed this Chinese corporate portfolio based on market capitalization and growth trajectory, which also includes Xiaomi, BYD, SMIC, JD.com, and NetEase. Frank Benzimra, a strategist at Société Générale, pointed out in a report on February 28 that this portfolio currently has an expected price-to-earnings ratio of 18 times, which is over 40% lower than that of the American "Seven Giants." On Friday, the Hang Seng Tech Index rose over 1%, with a cumulative increase of about 10% this week, reaching its highest level since the end of 2021. U.S. vs. China Now, the previously undervalued Chinese stocks seem to be on an upward trajectory, while U.S. stocks have faced multiple blows. U.S. President Donald Trump has disrupted the global trade order, and a series of tariff measures have left American businesses and consumers worried, shaking the belief that "the rise of the U.S. stock market is unstoppable," a notion stemming from "American exceptionalism." The rise of large U.S. tech stocks, led by NVIDIA, has encountered obstacles after years of growth, and investors have begun to question the reasonableness of their high valuations, demanding higher expectations for earnings surprises. Despite the rising optimism toward China, the long-standing performance of the Chinese stock market, unexpected policy shifts, and the intensifying geopolitical tensions under Trump's administration still leave some investors cautious Although the Hang Seng Tech Index has risen this year, it is still about 40% lower than its peak in 2021. Its five-year return rate is approximately 18%, which pales in comparison to the over 130% increase of the Nasdaq 100 Index during the same period. However, as concerns about the U.S. stock market bubble grow, China has become a viable alternative for many investors. Vey-Sern Ling, Managing Director of Union Bancaire Privee, stated, "The necessary driving factors for Chinese tech stocks to outperform the market are in place, including high-level government support, earnings recovery, and the structural growth theme of artificial intelligence. U.S. tech stock valuations have risen for two consecutive years, and now earnings are falling short of expectations, along with macro factors driving stock prices down." This has, to some extent, "prompted funds to flow from the U.S. to Europe and China."