The Chinese stock market performed strongly in 2025, with the technology sector standing out. The share prices of technology companies, represented by Alibaba (BABA), surged significantly, indicating a notable recovery in market confidence. Goldman Sachs analysis suggests that, although risks persist, the current bull market is expected to continue, with artificial intelligence emerging as the core driving force behind market development.
After years of regulatory pressures and economic challenges, Chinese technology stocks experienced a robust rebound in 2025. Alibaba’s American Depositary Receipts rose by over 75% during the year, significantly outperforming the S&P 500 Index. Companies such as NetEase (NTES) and Baidu (BIDU) also saw their share prices increase by more than 50%. Although current share prices remain below the 2020 peak, they have improved significantly compared to the low point in 2022. This rebound marks a shift in market sentiment and a revaluation of the sector.
The artificial intelligence trend is a core factor driving the rise in share prices. This trend has not only propelled Nvidia (NVDA) to milestone market capitalization but has also helped Chinese companies rise in the global technology competition. A Goldman Sachs report points out that artificial intelligence has altered the investment logic for Chinese technology stocks, driving the market from an expectation phase to a growth phase. The report predicts that the Chinese stock market could rise by 38% by the end of 2027, albeit at a more gradual pace, entering a “slow bull” market.
In addition to artificial intelligence, improvements in the trade environment have also provided support. The actual impact of U.S. tariffs has been lower than expected, partially offsetting the shortcomings of domestic fiscal policies, while Chinese companies continue to advance their globalization efforts. On the consumption front, although hotspots are scattered across different economic sectors, overall consumption remains vibrant. Inflation trends and policy guidance have also become key variables influencing the market. Furthermore, China’s latest five-year plan identifies technology as a priority direction before 2030, further clarifying the long-term development path.
Despite existing risks, Goldman Sachs believes that the Chinese stock market holds investment value, and diversified allocation holds significant meaning. In the field of artificial intelligence, the valuation of the Chinese ecosystem remains lower than that of the United States, with notable potential in capital expenditure and monetization of application scenarios. Sino-U.S. technology competition may give rise to a group of Chinese enterprises with structural advantages, particularly in areas with lower electricity and labor costs, as well as in industries like semiconductors supported by policies. For technology companies such as Alibaba that have undergone adjustments, the artificial intelligence trend brings new growth expectations for 2026.
