Chinese stocks listed in Hong Kong extended their recent surge on Friday, fueled by growing optimism about the nation’s expanding artificial intelligence capabilities.

The Hang Seng China Enterprises Index rose as much as 2.7%, moving closer to surpassing its October high. Tech heavyweights Xiaomi Corp, Tencent Holdings Ltd., and Meituan were among the top contributors to the upswing. On the mainland, the CSI 300 Index inched up 0.6%.

The rally follows a wave of enthusiasm sparked by AI startup DeepSeek, whose rapid progress has prompted investors to re-examine China’s potential in the sector. DeepSeek “is a reflection that China is making progress on its new productive forces and self-sufficiency goals,” said Marvin Chen, a strategist at Bloomberg Intelligence.

He added that “the tech momentum may carry the market into March,” when investors will look to the Two Sessions — the annual gatherings of China’s top legislature and advisory bodies — and corporate earnings for the next catalysts.

Further bolstering optimism are signs that Donald Trump’s 10% tariffs on Chinese products, first enacted during his administration, may have a milder impact than initially feared. Some global investors, burned in past years by the market’s volatility, now see the prospect of a more lasting upswing. Deutsche Bank described the country’s recent tech advances as a “Sputnik moment,” while a trader note from Goldman Sachs indicated that hedge funds have been scooping up Chinese equities at a brisk pace, driven largely by long positions.

Not everyone is convinced that this surge will hold. Skeptics caution that enthusiasm tied to any collaboration with DeepSeek has triggered knee-jerk gains. “At the end of the day, you don’t really know what the potential monetization opportunities are over the medium to longer term,” said Helen Zhu, chief investment officer at NF Trinity. She also warned of “potential uncertainty on whether what DeepSeek has been able to do can be repeated.”

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Chinese stocks listed in Hong Kong extended their recent surge on Friday, fueled by growing optimism about the nation’s expanding artificial intelligence capabilities.

The Hang Seng China Enterprises Index rose as much as 2.7%, moving closer to surpassing its October high. Tech heavyweights Xiaomi Corp, Tencent Holdings Ltd., and Meituan were among the top contributors to the upswing. On the mainland, the CSI 300 Index inched up 0.6%.

The rally follows a wave of enthusiasm sparked by AI startup DeepSeek, whose rapid progress has prompted investors to re-examine China’s potential in the sector. DeepSeek “is a reflection that China is making progress on its new productive forces and self-sufficiency goals,” said Marvin Chen, a strategist at Bloomberg Intelligence.

He added that “the tech momentum may carry the market into March,” when investors will look to the Two Sessions — the annual gatherings of China’s top legislature and advisory bodies — and corporate earnings for the next catalysts.

Further bolstering optimism are signs that Donald Trump’s 10% tariffs on Chinese products, first enacted during his administration, may have a milder impact than initially feared. Some global investors, burned in past years by the market’s volatility, now see the prospect of a more lasting upswing. Deutsche Bank described the country’s recent tech advances as a “Sputnik moment,” while a trader note from Goldman Sachs indicated that hedge funds have been scooping up Chinese equities at a brisk pace, driven largely by long positions.

Not everyone is convinced that this surge will hold. Skeptics caution that enthusiasm tied to any collaboration with DeepSeek has triggered knee-jerk gains. “At the end of the day, you don’t really know what the potential monetization opportunities are over the medium to longer term,” said Helen Zhu, chief investment officer at NF Trinity. She also warned of “potential uncertainty on whether what DeepSeek has been able to do can be repeated.”

Cryptopolitan Academy: How to Write a Web3 Resume That Lands Interviews - FREE Cheat Sheet