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China stocks could gain 20% on AI boom: Goldman Sachs
Goldman Sachs expects the MSCI China Index to rise by up to 20% in 2026, citing earnings growth driven by AI and Chinese firms’ overseas expansion.
The forecast includes both yuan-traded stocks and Chinese companies listed in Hong Kong and the US.
Goldman predicts the CSI 300 Index, which tracks mainland-listed equities, will climb 12% this year.
The bank estimates corporate profits could grow as much as 14% in 2026, compared to single-digit growth in 2025.
Goldman said exports and AI technology are likely to be the main contributors to market profits, with internet and hardware companies projected to see about 20% profit growth year-on-year due to progress in AI monetization.
🔗 Source: South China Morning Post
🧠 Food for thought
Implications, context, and why it matters.
Goldman’s call for the MSCI China Index to rise to 20% in 2026 depends on AI revenue turning into profits
- Goldman sees corporate profits rising 14% in 2026 from 4% in 2025, with internet and hardware companies targeting 20% profit growth from AI 1. Chinese tech stocks trade at lower valuation multiples (such as price-to-earnings ratios) than US peers despite stronger expected earnings growth 2, signaling doubt about AI profits.
- Chinese firms report high AI use, 93% of workers versus 67% in the US, with faster data center growth expected in China 2. The market reached 700 billion yuan in 2024 3. Local models handle text, images, and audio 3. Rollouts now span office tools, education, industrial design, plus content creation 3.
Cross-border service providers can tap Chinese firms’ overseas push
- Business-to-business (B2B) providers can win work in cross-border payments, compliance, and logistics as exporters lift profits 2. Chinese online literature reaches 350 million overseas readers, with Japan up 180% 3. In H1 2025, 25 domestic games earned 11.6 billion yuan abroad 3.
- Adtech firms and Content Delivery Network (CDN) vendors focused on Asia-Pacific plus emerging markets should start outreach 1. Goldman projects US$200 billion in southbound capital flows (mainland investor money into Hong Kong-listed stocks) as mainland investors set records in Hong Kong-listed shares 1. Firms powering Going Global initiatives (the push to expand abroad) gain from export momentum plus a tech focus in the latest five-year plan 2.
