Morgan Asset Management: The Chinese technology sector will welcome "more DeepSeek moments"

JP Morgan Asset Management expects that Chinese technology stocks will continue to benefit from technological breakthroughs, as China intensifies efforts to nurture more innovative companies like DeepSeek, investors are likely to witness more milestone progress. The institution believes that the growth in artificial intelligence spending and policy support will be key catalysts driving the sector's rise. According to the latest report from Bloomberg, the company's global market strategist Raisah Rasid stated at a media event in Singapore that there are still plenty of opportunities in the Chinese technology sector, and investors will see increasing advancements in robotics technology as well as more DeepSeek moments. Year-to-date, the index measuring mainland Chinese technology stocks has risen by about 12%, outperforming similar indices in Hong Kong and the United States, with investors continuously flocking to the sector. From chips to humanoid robots to commercial rockets, daily breakthroughs in the Chinese technology sector are driving market enthusiasm, and a large number of planned stock listings are also adding momentum to the market. Rasid pointed out that the capital expenditure of China's top cloud service providers was about $50 billion last year, while their American competitors' expenditure reached $350 billion, indicating that there is still significant room for capital expenditure growth among Chinese companies. Looking ahead, JP Morgan Asset Management believes that Chinese technology companies will not only benefit from government-driven acceleration of industrial development but may also gain from a potential easing of U.S. chip export restrictions. On the demand side, China is integrating artificial intelligence into a wide range of industries such as food and hospitality, creating more application scenarios for technology companies. Capital Expenditure Gap Indicates Growth Potential There is a significant gap in capital expenditure on artificial intelligence between Chinese and American technology companies. Rasid pointed out that the capital expenditure of China's top cloud service providers was about $50 billion last year, only about one-seventh of the $350 billion spent by their American competitors. This gap leaves ample room for Chinese companies to increase their investments in the future, and the growth in capital expenditure will, in turn, drive technological advancements. From the demand side, China is integrating artificial intelligence technology into various traditional industries such as food and hospitality. In addition, the government's push for accelerated industrial development and the potential easing of U.S. chip export restrictions are expected to bring additional benefits to Chinese technology companies. These combined factors form the fundamentals supporting the continued rise of the sector. Policy and Innovation Dual Drivers JP Morgan Asset Management emphasizes that a more favorable policy environment will be one of the key catalysts driving Chinese technology stocks. China is intensifying efforts to create more innovative companies like DeepSeek, with technological breakthroughs emerging in fields ranging from chips to humanoid robots to commercial rockets. The market performance year-to-date has already confirmed this trend. The index measuring mainland Chinese technology stocks has risen by about 12%, outperforming similar indices in Hong Kong and the United States. A large number of planned new stock listings are also injecting new vitality into the market. Rasid stated that investors will witness increasing advancements in robotics technology and breakthrough moments, and the innovation momentum in the Chinese technology sector is still accelerating