--- title: "Wall Street on Chinese Stocks: From \"Powerlessness\" to \"Opportunistic Bullishness\"" type: "News" locale: "en" url: "https://longbridge.com/en/news/295324209.md" description: "As computing costs rise and price wars intensify, the economic benefits of the pure model layer are being eroded. A consensus is gradually forming in the market: the technical catch-up for large models is not particularly difficult, and the ultimate commercial winners will emerge in multi-model ecosystems, AI Agent applications, and on-device AI" datetime: "2026-08-09T11:36:59.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/295324209.md) - [en](https://longbridge.com/en/news/295324209.md) - [zh-HK](https://longbridge.com/zh-HK/news/295324209.md) --- # Wall Street on Chinese Stocks: From "Powerlessness" to "Opportunistic Bullishness" Along with the strong rebound in the sector in July, overseas investors' pessimism towards Chinese internet and AI large model stocks has dissipated, marking a substantive shift from the "sense of powerlessness" in late June to "tactical long positions." In his latest market feedback, Bank of America (BofA) analyst Alex Liu pointed out that the three core dynamics currently dominating the Chinese internet sector have become clear: the inevitable commoditization trend of AI large models, the marginal easing of competitive pressure on ByteDance in local life services and e-commerce, and the persistently weak macro consumption and summer travel demand. Capital is re-evaluating the cost-performance ratio and fundamental delivery capabilities of major tech companies. As computing costs rise and price wars intensify, the economic benefits of the pure model layer are being eroded. A consensus is gradually forming in the market: the technical catch-up for large models is not particularly difficult, and the ultimate commercial winners will emerge in multi-model ecosystems, AI Agent applications, and on-device AI. ## AI Large Models Mired in "Commoditization" Quagmire; Application Layer and On-Device AI Become Key to Breaking Through The race for Chinese AI large models is experiencing extreme internal competition. Merely leading in performance by a few weeks is no longer sufficient reason to buy into a single large model stock. Capital is closely monitoring key models about to be released, including DeepSeek V4 Pro, Alibaba's Qwen 4.0, Zhipu AI's GLM 5.3, and MiniMax M3.1. Among unlisted unicorns, Zhipu AI is regarded as a "high-quality" target due to its strong performance in users and revenue following the release of GLM 5.2. However, facing rapid iteration by peers, its ability to maintain its position in the first tier of coding capabilities is being questioned. In contrast, MiniMax is considered to lag behind the leaders in model capabilities, but its $11 billion valuation is attractive to some investors. Among the major tech giants, after Tencent officially launched Hunyuan HY3.0 in July, market doubts about its progress in foundational large models significantly subsided. Amidst the trend of multi-model adoption and token price deflation, Tencent is seen as a core beneficiary due to the user leadership of its WorkBuddy in the AI Agent application layer and the improved consumer-side economic benefits brought by the popularization of on-device AI. However, concerns remain: the large-scale rollout of WeChat Agents may incur significant token costs, which, combined with depreciation pressures, has sparked intense debate about the downside risk to its EPS from the second half of 2026 to 2027. Some investors even anticipate a year-over-year decline in its 2027 earnings. ## ByteDance's Offensive Slows, Creating a Tactical Long Window for Trading Platforms Channel research indicates that competitive pressure on ByteDance in local life services and e-commerce is substantively decreasing. This marginal change has directly prompted capital to become more tactically bullish on listed trading platform companies. Meituan and JD.com have become the core beneficiaries of the easing competition, with significant recovery in market attention. Calculations show that as competition in instant retail slows, Meituan's unit economics (UE) will continue to improve into the second half of 2026, keeping bullish sentiment high; JD.com is also seeing expectations for EPS improvement, coupled with shareholder return actions such as increased buybacks, leading to a warming up in market interest. However, a common concern for both is whether the funds saved from reducing losses in food delivery and instant retail will be reinvested into new businesses with uncertain endgames, such as AI and overseas expansion. Moreover, the visibility of Meituan's order volume growth remains low. Alibaba has currently become a consensus buy, but capital no longer views it as a "buy and hold" core position. A consensus has formed that stopping losses in its instant retail business will lead to positive EPS revisions in the coming quarters; however, expectations for Customer Management Revenue (CMR) have been lowered. Short-term expectations for its cloud business are extremely high, with the market generally expecting its year-over-year growth in the June quarter to reach or exceed 45%, with some investors projecting cloud revenue growth of over 50% by 2027. The other side of the coin is that, facing the rise of independent AI labs, the competitiveness of Tongyi Qianwen (Qwen) and its free cash flow performance remain key focus areas for investors. ## Weak Macro Consumption Suppresses Sentiment; Summer Travel Faces a Major Test Entering July, market expectations for domestic consumption remain bearish, with growing concerns specifically about summer travel demand. Although Trip.com saw a brief rebound following the end of regulatory investigations, investors were not eager to bottom-fish. Affected by weak consumer sentiment and unfavorable weather, summer tourism activity has been sluggish recently, raising market concerns about a new round of EPS downgrades. Additionally, pressure on hotel take rates is increasing, and the company faces the risk of losing market share to Meituan and ByteDance. NetEase was a consensus long target during the sell-off in June, but the underwhelming performance of "Sea of Remnant" released in early July raised concerns about short-term EPS pressure. However, version updates for older games like "Justice Online" and the launch of infinite servers in July are expected to support recent performance. ## Other Targets Regarding Baidu, investor focus has completely shifted to its self-developed AI chip design capabilities, revenue scale, potential valuation, and spin-off timeline, with hesitation over whether to continue holding shares for the potential upside from a chip spin-off. Bilibili has received relatively less attention, with investors waiting for Tencent to complete its equity disposal. However, its platform value has been validated after resisting competition from ByteDance in recent years, and organic engagement growth since 2025 is creating scarce value for the company. Kuaishou faces continuous competition from ByteDance's similar products for its "Kling" model, and lacking short-term catalysts after recent financing, market interest is scant. Pinduoduo (PDD) and Tencent Music Entertainment (TME) are also temporarily neglected by capital due to the lack of a clear logic for bottom-fishing. ### Related Stocks - [BAC.US](https://longbridge.com/en/quote/BAC.US.md) - [09988.HK](https://longbridge.com/en/quote/09988.HK.md) - [BABA.US](https://longbridge.com/en/quote/BABA.US.md) - [00700.HK](https://longbridge.com/en/quote/00700.HK.md) - [03690.HK](https://longbridge.com/en/quote/03690.HK.md) - [09618.HK](https://longbridge.com/en/quote/09618.HK.md) - [JD.US](https://longbridge.com/en/quote/JD.US.md) - [09961.HK](https://longbridge.com/en/quote/09961.HK.md) - [TCOM.US](https://longbridge.com/en/quote/TCOM.US.md) - [09999.HK](https://longbridge.com/en/quote/09999.HK.md) - [NTES.US](https://longbridge.com/en/quote/NTES.US.md) - [09888.HK](https://longbridge.com/en/quote/09888.HK.md) - [BIDU.US](https://longbridge.com/en/quote/BIDU.US.md) - [09626.HK](https://longbridge.com/en/quote/09626.HK.md) - [BILI.US](https://longbridge.com/en/quote/BILI.US.md) - [01024.HK](https://longbridge.com/en/quote/01024.HK.md) - [PDD.US](https://longbridge.com/en/quote/PDD.US.md) - [TME.US](https://longbridge.com/en/quote/TME.US.md) - [BAC-Q.US](https://longbridge.com/en/quote/BAC-Q.US.md) - [BML-L.US](https://longbridge.com/en/quote/BML-L.US.md) - [BAC-L.US](https://longbridge.com/en/quote/BAC-L.US.md) - [BAC-K.US](https://longbridge.com/en/quote/BAC-K.US.md) - [BML-H.US](https://longbridge.com/en/quote/BML-H.US.md) - [BAC-N.US](https://longbridge.com/en/quote/BAC-N.US.md) - [BAC-E.US](https://longbridge.com/en/quote/BAC-E.US.md) - [MER-K.US](https://longbridge.com/en/quote/MER-K.US.md) - [BAC-O.US](https://longbridge.com/en/quote/BAC-O.US.md) - [BML-G.US](https://longbridge.com/en/quote/BML-G.US.md) - [BAC-M.US](https://longbridge.com/en/quote/BAC-M.US.md) - [BAC-B.US](https://longbridge.com/en/quote/BAC-B.US.md) - [BML-J.US](https://longbridge.com/en/quote/BML-J.US.md) - [BAC-S.US](https://longbridge.com/en/quote/BAC-S.US.md) - [BAC-P.US](https://longbridge.com/en/quote/BAC-P.US.md) - [8648.JP](https://longbridge.com/en/quote/8648.JP.md) - [89988.HK](https://longbridge.com/en/quote/89988.HK.md) - [HBBD.SG](https://longbridge.com/en/quote/HBBD.SG.md) - [TCEHY.US](https://longbridge.com/en/quote/TCEHY.US.md) - [80700.HK](https://longbridge.com/en/quote/80700.HK.md) - [HTCD.SG](https://longbridge.com/en/quote/HTCD.SG.md) - [TCTZF.US](https://longbridge.com/en/quote/TCTZF.US.md) - [83690.HK](https://longbridge.com/en/quote/83690.HK.md) - [MPNGY.US](https://longbridge.com/en/quote/MPNGY.US.md) - [HMTD.SG](https://longbridge.com/en/quote/HMTD.SG.md) - [89618.HK](https://longbridge.com/en/quote/89618.HK.md) - [HTGD.SG](https://longbridge.com/en/quote/HTGD.SG.md) - [89888.HK](https://longbridge.com/en/quote/89888.HK.md) - [81024.HK](https://longbridge.com/en/quote/81024.HK.md) - [01698.HK](https://longbridge.com/en/quote/01698.HK.md) ## Related News & Research - [I build AI data centers. 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