A drastic reversal overnight: South Korean chip stocks collapse, Hong Kong-listed tech stocks stage a fierce rebound — global AI capital is undergoing a "mass migration".

According to multiple foreign media reports, Hong Kong's technology stocks, which had previously underperformed, have recently staged a rebound, while persistent selling in South Korean chip stocks has dragged the KOSPI into a bear market, indicating that capital is shifting toward less crowded artificial intelligence trades. 

According to Dow Jones News, on Wednesday this week, the Hang Seng Index in Hong Kong rose by 3.0%, and the Hang Seng Tech Index, known as the "Hong Kong version of the Nasdaq", jumped by 5.0%. Meanwhile, the KOSPI plummeted by 5.3%, marking a cumulative 23% decline from its recent peak and entering a bear market. 

The performance of the two markets has reversed: in the first half of this year, the KOSPI was one of the best-performing indices in Asia, while the Hang Seng Index significantly lagged behind. 

On Wednesday, the Hang Seng China Enterprises Index rose as much as 3.4%, posting its largest gain in 14 months. On that day, Alibaba's stock price surged by 12%, marking its best single-day performance in nearly a year, Baidu rose by 6.3%, and Tencent Holdings increased by 3.8%. 

The Wall Street Journal quoted Charu Chanana, chief investment strategist at Saxo Markets, as saying that while investors are not necessarily abandoning AI, they are pulling out of the most crowded parts of the trade and looking for different AI-driven catalysts. 

The aforementioned Dow Jones News report pointed out that Hong Kong seems to be an ideal choice, as internet stocks listed in Hong Kong have long been underweighted and have low valuations. Despite the rally on Wednesday, both Alibaba and Tencent have seen their stock prices decline by more than 20% so far this year. 

However, the report also quoted analysts warning that while this rally in Hong Kong appears to be an initial sign of portfolio reallocation, it is too early to call it a sustained sector rotation. They added that whether a more lasting rebound can emerge in the Hong Kong market still depends on the performance of internet companies and global liquidity. 

The Chief Investment Office (CIO) of UBS Wealth Management released an institutional view stating that AI is a key driver of this bull market, and the Asia-Pacific region, as the backbone of the global AI industrial chain, has performed particularly brilliantly. East Asian markets with high technology stock weights have significantly outperformed, while economies with lower tech exposure have been under pressure due to high oil prices and weak consumption. 

Looking ahead to the second half of the year, the institution believes that AI will remain the main driving force for further market upside, while opportunities in other Asian sectors and markets are also worth noting. UBS stated that leading Chinese internet platforms have shown clear signs of accelerating AI monetization, and with the launch of a new generation of AI agents, cloud service revenue is expected to improve. Currently, the forward price-to-earnings ratio of the MSCI China Index is only 10.8 times, which the institution believes underestimates the rapid adoption of AI in China's digital economy. The institution continues to favor large internet and platform companies with strong AI monetization potential, leading cloud services, and solid core businesses, as well as certain semiconductor and AI infrastructure enterprises that benefit from domestic substitution and AI capital expenditure. 

In addition, according to multiple media reports, Wall Street giant Goldman Sachs, which has held South Korean stocks for over a year, now advises clients to shift capital from South Korean AI stocks to their Chinese counterparts. In a recent report titled "Investment Strategy: Long China's AI Value Chain", Goldman Sachs analyst Louis Mills wrote: "China's AI sector has officially come into our spotlight." The reason is that "an unprecedented combination of large-scale national support, surging global demand, and structural capital rotation has made China's AI one of the most compelling growth stories in the technology space today." 

Goldman Sachs put forward three key points to support its investment thesis: first, there is a severe mismatch between the market capitalization of Chinese AI companies and their addressable market, leaving ample room for valuation upside; second, China's AI industrial chain possesses unique competitive advantages that are undervalued by the market; third, China's AI sector has outperformed other Chinese assets, with capital structurally increasing its allocation. 

The views in this article are for reference only and do not constitute investment advice. Investment involves risks, and caution is advised when entering the market. 

This article is from the WeChat Official Account "Zhongxin Jingwei" (ID: jwview), authored by Luo Kun, and published with authorization from 36Kr.