JP Morgan: In the past 4 years, we have never seen clients so optimistic about the Chinese stock market
JP Morgan reported that in the past four years, client optimism towards the Chinese stock market has been unprecedented. Investors' confidence in investing in China's internet, IT industry, and new energy vehicles has increased, especially in the AI sector. DeepSeek's success has enhanced global investors' recognition of China's AI capabilities. Although the gap in price-to-earnings ratios between Chinese and American representative stocks is narrowing, the gap between Alibaba and Amazon remains significant. Tencent's financial report will be key in assessing AI capital expenditures and future prospects
Global investors are focusing on more attractive opportunities, as China's internet and AI companies are less affected by macro factors, leading to stronger investor confidence.
JP Morgan reported today on the meetings with equity investors in North America and emerging markets over the past week.
"In the past four years, we have never seen clients so optimistic about the Chinese stock market. [Fear]"
Most investors agree that the Chinese internet/IT industry and leading new energy vehicle/edge computing companies are investable.
DeepSeek has become a decisive moment for convincing global investors of China's AI capabilities, which has also strengthened investors' focus on allocations in internet/IT/new energy vehicles, while being less disturbed by macro fluctuations.
In comparisons of representative stocks from China and the U.S. (such as Tencent vs Meta, Xiaomi vs Apple, telecom operators vs Verizon, etc.), the gap in forward 12-month price-to-earnings ratios (FTM P/E) is narrowing or reversing, but the gap between Alibaba and Amazon remains significant.
For tech-focused investors, AI capital expenditures (capex) remain a core issue. Tencent's financial report today is key to assessing the scale of new AI capital expenditures and future monetization prospects. (Our topic yesterday was "Waiting for Tencent's Financial Report.")
Of course, beyond emerging market investors, more global/international investors are also eager to seek attractive risk-return investment opportunities during the current rebound phase. (Hard AI)
