Goldman Sachs: China’s AI rally isn’t a bubble as valuations lag US

Goldman Sachs’ chief China equity strategist said China’s AI-driven stock rally is not a bubble, citing room for further growth in valuations and earnings among tech firms.

Kinger Lau, speaking in an interview, pointed to China’s focus on AI applications — rather than computing power — as a factor supporting potential monetization.

He noted Chinese tech stocks trade at lower valuations than US peers, with the top 10 Chinese tech firms valued at US$2.5 trillion, compared to US$25 trillion for their US counterparts.

Goldman Sachs forecasts earnings growth of 12% to 13% for Chinese companies in 2026, up from an expected 2% to 3% this year.

The bank projected a 30% rise for Chinese stocks by 2027.

Lau said AI investments, GDP growth, and overseas expansion will drive future gains, and highlighted increasing international investor interest, including from emerging markets.

🔗 Source: South China Morning Post

🧠 Food for thought

Implications, context, and why it matters.

Chinese tech firms’ AI revenue remains too small for optimism

Unique Research (a market-intelligence firm tracking private AI companies) lists a top 100 by Annual Recurring Revenue 1. Only four entries are Chinese 1. They include Glority (consumer productivity software), PLAUD (AI voice-hardware startup), ByteDance and Zuoyebang (education technology provider) 1. Their ARR totals $447 million, or 1.23% of the list’s $36.4 billion 1.
Chinese AI apps reach 2.2 billion monthly active users, yet revenue lags that scale 1.

Infrastructure vendors can benefit from China’s AI move into ASEAN markets

China’s factory robot exports rose almost 60% year over year in H1 2025, with buyers in Association of Southeast Asian Nations (ASEAN) markets such as Vietnam and Thailand 2.
Beijing launched the ZGC AI Business International Service Hub (ASEAN), a program that helps Chinese AI firms find customers and navigate ASEAN markets 3. The effort adds demand for localization and market entry work, plus tools such as the AITIR multilingual real-time translation card (a hardware translation accessory) launched at the China-ASEAN AI conference 3 4.
Chinese tech giants spent over $8.5 billion on capital expenditures in Q2 2025, up 168% year over year, and Alibaba put $5.3 billion into AI infrastructure 5. Payment processors, Content Delivery Network (CDN) providers plus cloud security vendors that move transactions plus traffic between China and ASEAN can prepare for more demand 5. 96% of enterprises deploy AI models that need protection 5.