Wall Street giants are doubling down on optimistic forecasts for China's A-share market as the country's artificial intelligence (AI) expansion reshapes investor sentiment. JPMorgan, Goldman Sachs, and Morgan Stanley have all recently upgraded targets for Chinese equities, citing accelerating AI adoption, stabilizing economic fundamentals, and evolving consumer trends.
At the heart of this rally lies China's strategic "AI Plus" initiative outlined in its 2024 Government Work Report. By integrating AI with manufacturing and service sectors, the world's second-largest economy aims to unlock productivity gains worth 2.5% annual earnings growth over the next decade, according to Goldman Sachs projections.
JPMorgan Asset Management's Asia-Pacific strategist Tai Hui emphasized China's unique position during a Bloomberg interview: "The combination of DeepSeek's cost-saving AI solutions, revived property market stability, and over 600 million registered AI users creates a growth equation global investors can't ignore."
Market dynamics reflect this shift. Nearly 200 government-approved generative AI models entered China's market by late 2024, driving what Morgan Stanley analysts call a "technological inflection point." The bank raised its Hang Seng Index target to 25,800, while highlighting Hong Kong's role as a gateway for international investors seeking AI exposure through Stock Connect programs.
Goldman Sachs report "Global Marketing Feedback: China is Back" captured the mood, noting investor resilience toward geopolitical headwinds amid expectations of $200 billion in potential capital inflows. "China's liquidity depth and valuation discounts make it a compelling portfolio diversifier," strategist Kinger Lau observed.
