Goldman Sachs Raises China Stock Market Target, Predicts $200 Billion Inflow Due to AI Adoption

AI Adoption To Draw Upto $200B in Chinese Equities, Goldman Sachs Forecasts. EPS To Rise By 2.5% Annually Over The Next Ten Years - Apple (NASDAQ:AAPL), Amazon.com (NASDAQ:AMZN)

Goldman Sachs predicts a substantial rise in Chinese stocks due to the rapid implementation of artificial intelligence (AI) technologies such as DeepSeek. What Happened: Goldman Sachs analysts Kinger Kau, Timothy Moe, Si Fu, and Kevin Wong revealed that the bank has revised its MSCI China Index target from 75 to 85, indicating a 16% upside over the next year, according to a report by Bloomberg. The bank forecasts that Chinese stocks will draw around $200 billion and increase by up to 19% in the next 12 months. The bank also suggests that the broad adoption of AI could enhance Chinese companies' earnings per share by nearly 2.5% annually over the next ten years. This is attributed to cost savings, productivity improvements, and the generation of new revenue streams enabled by these technologies. Goldman Sachs also highlighted that the "Chinese AI story" might drive net buying and shift global asset managers away from their "conservative and underweight allocations" to Chinese equities. SEE ALSO: Xi Jinping And Jack Ma's Upcoming Meeting 'A Clear Message' Of Beijing's Support, Stock Soars In Hong Kong Ahead Of Earnings Why It Matters: DeepSeek-R1 has gained attention globally for demonstrating capabilities on par with models from OpenAI, Google, and Anthropic -- while maintaining significantly lower training costs. Goldman Sachs' prediction comes amid widespread discussions comparing the valuation of tech stocks, particularly the 'Magnificent Seven' -- Apple Inc. AAPL, Amazon.com Inc. AMZN, Alphabet Inc. GOOG GOOGL, Meta Platforms Inc. META, Microsoft Corp. MSFT, Nvidia Corp. NVDA, and Tesla Inc. TSLA to that of Chinese equities. On Feb 6, Bloomberg data revealed that the 30 companies in the Hang Seng Tech Index had an average price-to-earnings ratio of 20.5 times, while the Mag 7 traded at an average of 41.4 times. While the CEO of Trivariate Research, Adam Parker, recommended investors reduce their exposure to the "Magnificent Seven" stocks amid high valuation and related risks, Bridgewater Associates, a top hedge fund, has challenged the widespread belief that these stocks are overvalued. Besides high valuations, Peter Oppenheimer, the Chief Global Equity Strategist at Goldman Sachs has previously expressed concerns over the high capex spending of the U.S. big tech companies. "..the extraordinary ramp-up in capex spending that mega-cap technology companies are making is reducing free cash flow and the scale of future profit growth," cautioned Oppenheimer. READ MORE: Options Corner: Why Super Micro Computer's Super Rally Could Continue Marching Higher Image via Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. AAPLApple Inc$244.651.29%Overview Rating:Good75%Technicals Analysis1000100Financials Analysis600100WatchlistOverviewAMZNAmazon.com Inc$228.60-0.77%GOOGAlphabet Inc$186.97-0.49%GOOGLAlphabet Inc$185.24-0.48%METAMeta Platforms Inc$737.481.22%MSFTMicrosoft Corp$408.10-0.59%NVDANVIDIA Corp$138.482.36%TSLATesla Inc$354.00-0.55%Market News and Data brought to you by Benzinga APIs

Goldman Sachs raises China stock market target on AI boost

SINGAPORE (Reuters) - Goldman Sachs raised its target price for Chinese stocks on Monday, estimating that AI adoption could boost earnings growth and potentially bring in $200 billion of inflows. Chinese tech stocks have been on a strong rally, clocking their best winning streak in over two years last week, boosted by DeepSeek's AI breakthrough, which reignited investor interest in China's technology capabilities. On Monday, Goldman raised its 12-month target price for China's CSI300 index to 4,700 from 4,600. It also raised its price target for MSCI China to 85 from 75. (Reporting by Ankur Banerjee in Singapore; Editing by Tom Hogue)

Goldman Sachs raises China stock market target on AI boost

Goldman Sachs raised its target price for Chinese stocks on Monday, estimating that AI adoption could boost earnings growth and potentially bring in $200 billion of inflows. Chinese tech stocks have been on a strong rally, clocking their best winning streak in over two years last week, boosted by DeepSeek's AI breakthrough, which reignited investor interest in China's technology capabilities. On Monday, Goldman raised its 12-month target price for China's CSI300 index to 4,700 from 4,600. It also raised its price target for MSCI China to 85 from 75. The blue-chip index was last at 3,954.