The Chinese stock market has gained the favor of Wall Street strategists, who state that the strength of new AI technologies will help sustain the bull market. Strategists from Morgan Stanley, JPMorgan, and UBS Group expect that the Chinese stock market will continue to rise, driven by the DeepSeek AI model.

The global shock and awe from DeepSeek has sparked a fundamental reconsideration of market attractiveness, challenging previous assumptions about China's lag in cutting-edge technology. The MSCI Chinese Index has risen by about 15% from its January low, outperforming its Asian peers this year.

Strategists from Morgan Stanley, including Laura Wang, wrote in a report on Tuesday: "After a long period of limited attention, global investors are beginning to reassess China's investability in technology and AI. Given the low positions of global investors, we expect this momentum to continue in the short term."

The increasingly optimistic sentiment has stimulated a series of actions from buyers, attracting fund managers such as hedge funds and Fidelity International. Although there is still a long way to prove that AI can benefit the broader private sector, this trend at least helps offset the downward pressure from trade tensions.

Strategists from UBS Group, including James Wang, stated in a report on Wednesday that based on experiences from the 4G, 5G, and Cloud Computing eras, "It seems we have not yet completed half of the rebound." They added that ample liquidity and low interest rates should assist AI-related companies in further interest rate adjustments. This optimistic view stands in stark contrast to the cautious sentiment that was prevalent a few months ago when global banks warned of further downside risks following events such as Trump's election victory.

Meanwhile, strategists from JPMorgan, including Rajiv Batra, noted that capital inflow into Chinese Internet companies has been positive this year, with a surge following the impact of DeepSeek. They wrote: "We believe a window of opportunity will emerge in Asia in the coming months, with a tactical rebound in the Chinese stock market driving momentum upward."

Last week, the research report titled "China Stock Strategy," led by Deutsche Bank analyst Peter Milliken, known as the "strongest bull" in the Chinese market, was released. Milliken has been bullish on the Chinese stock market and has emphasized "reversal trades" almost every few months since the market downturn in 2021.

This latest research report centers around the concept of "China's Sputnik Moment," arguing that China's technological innovation has triggered a "cognitive leap" globally. By 2024, China's dominant position in global manufacturing will be further solidified, surpassing Germany to become the world's largest auto exporter, and will unveil the world's first sixth-generation fighter jet and low-cost AI system DeepSeek. Marc Andreessen, an investor in Silicon Valley, even referred to the release of DeepSeek as the "Sputnik Moment of AI," symbolizing that China's technological rise cannot be ignored. (The Soviet Union successfully launched the world's first artificial satellite, Sputnik 1, in 1957, thus making the "Sputnik Moment" a symbol of significant change in the global competitive landscape).

In addition, after experiencing the "DeepSeek Shockwave" that severely impacted US tech giants, Goldman Sachs reaffirmed its bullish sentiment towards the Chinese stock market last week. Goldman Sachs anticipates that under a neutral expectation, the MSCI Chinese Index is expected to rise by 14% this year, while under optimistic expectations, the index's rise could soar to 28%. Goldman Sachs emphasized that stocks in the "soft technology" sector are expected to outperform the entire large-cap market.

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