We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
It’s no secret on Wall Street that the Chinese stock market has been frustrating for investors, to say the least. The CSI 300, the leading Chinese capitalization-weighted index, last printed fresh all-time highs precisely four years ago. Chinese equities have suffered for various reasons, including China’s population decline, sky-high youth unemployment, a real estate bubble, and government overstepping and regulation concerns.
As if all that wasn’t enough, newly re-elected President Donald Trump has wasted no time hitting Chinese imports with hefty tariffs. Meanwhile, the Chinese government has retaliated, spreading investor concerns about an all-out trade war.
Despite the mounting concerns, you may be surprised when I tell you that I am very bullish on Chinese equities. Today, I will discuss the top five reasons I am bullish on China:
Chinese Equities Resilient Despite Tariff Threats
I always teach investors not to observe news in a vacuum and, instead, monitor the price action versus the news. In other words, scary headlines can be a bullish omen if price is resilient in the wake of them. This scenario is exactly what is playing out with Chinese equities and tariffs. For instance, despite the back-and-forth tariff rhetoric between the US and China, the iShares China Large Cap ETF is up nearly 5% for the week and breaking out to multi-month highs – a sign of resilience.
In addition, investors should remember that during Trump’s first term, tariffs were used as a negotiating tactic more than anything else.
China: Contrarian Bet
The best investments usually go against the crowd. David Tepper, one of the greatest contrarian investors in history, has several Chinese stocks in his portfolio, including Alibaba, JD.com, Baidu and the Kran CSI China Internet ETF. Moreover, despite the recent uptrend in Chinese stocks, FXI’s short-interest is at multi-year highs, which could provide continued fuel for the fire.
Chinese Government Wants to Stimulate Economy
Liquidity, more than anything else, drives bull markets. Recently, the People’s Bank of China (PBOC) implemented several stimulatory measures, including easing lending restrictions, cutting interest rates, and providing funds to the fledgling real estate sector.
Chinese Stocks Have Dirt Cheap Valuations
Most Chinese stocks have generationally low valuations. For instance, BABA, China’s most prominent tech stock, has a P/E Ratio of 10x, one-third of its valuation back in 2020. In addition, earnings growth is accelerating again – a lethally bullish combo.
Chinese AI Technology Catching Up to US
China’s DeepSeek AI model is a game-changer for the US/China AI race. Though several analysts have debunked claims that DeepSeek was able to produce a ChatGPT-like large language model at a fraction of the cost, the success of the AI model suggests that China has caught up to the US in the cutthroat AI race, or at the very least, is not far behind. Even Apple, America’s most-recognized tech juggernaut, has partnered with Alibaba to develop AI features for its iPhone in China.
Bottom Line
Despite concerns surrounding China’s economy, a confluence of factors suggests a compelling bullish case for Chinese stocks. Resilient price action, contrarian sentiment, government stimulus, attractive valuations, and rapid AI advancements create immense growth potential.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Zacks Investment Ideas feature highlights Alibaba, JD.com, Baidu, KWEB and Apple
For Immediate Release
Chicago, IL – February 14, 2025 – Today, Zacks Investment Ideas feature highlights Alibaba (BABA - Free Report) , JD.com (JD - Free Report) , Baidu (BIDU - Free Report) , the Kran CSI China Internet ETF (KWEB - Free Report) and Apple (AAPL - Free Report) .
Ignore the Headlines, Buy Chinese Stocks
Should You Invest in China?
It’s no secret on Wall Street that the Chinese stock market has been frustrating for investors, to say the least. The CSI 300, the leading Chinese capitalization-weighted index, last printed fresh all-time highs precisely four years ago. Chinese equities have suffered for various reasons, including China’s population decline, sky-high youth unemployment, a real estate bubble, and government overstepping and regulation concerns.
As if all that wasn’t enough, newly re-elected President Donald Trump has wasted no time hitting Chinese imports with hefty tariffs. Meanwhile, the Chinese government has retaliated, spreading investor concerns about an all-out trade war.
Despite the mounting concerns, you may be surprised when I tell you that I am very bullish on Chinese equities. Today, I will discuss the top five reasons I am bullish on China:
Chinese Equities Resilient Despite Tariff Threats
I always teach investors not to observe news in a vacuum and, instead, monitor the price action versus the news. In other words, scary headlines can be a bullish omen if price is resilient in the wake of them. This scenario is exactly what is playing out with Chinese equities and tariffs. For instance, despite the back-and-forth tariff rhetoric between the US and China, the iShares China Large Cap ETF is up nearly 5% for the week and breaking out to multi-month highs – a sign of resilience.
In addition, investors should remember that during Trump’s first term, tariffs were used as a negotiating tactic more than anything else.
China: Contrarian Bet
The best investments usually go against the crowd. David Tepper, one of the greatest contrarian investors in history, has several Chinese stocks in his portfolio, including Alibaba, JD.com, Baidu and the Kran CSI China Internet ETF. Moreover, despite the recent uptrend in Chinese stocks, FXI’s short-interest is at multi-year highs, which could provide continued fuel for the fire.
Chinese Government Wants to Stimulate Economy
Liquidity, more than anything else, drives bull markets. Recently, the People’s Bank of China (PBOC) implemented several stimulatory measures, including easing lending restrictions, cutting interest rates, and providing funds to the fledgling real estate sector.
Chinese Stocks Have Dirt Cheap Valuations
Most Chinese stocks have generationally low valuations. For instance, BABA, China’s most prominent tech stock, has a P/E Ratio of 10x, one-third of its valuation back in 2020. In addition, earnings growth is accelerating again – a lethally bullish combo.
Chinese AI Technology Catching Up to US
China’s DeepSeek AI model is a game-changer for the US/China AI race. Though several analysts have debunked claims that DeepSeek was able to produce a ChatGPT-like large language model at a fraction of the cost, the success of the AI model suggests that China has caught up to the US in the cutthroat AI race, or at the very least, is not far behind. Even Apple, America’s most-recognized tech juggernaut, has partnered with Alibaba to develop AI features for its iPhone in China.
Bottom Line
Despite concerns surrounding China’s economy, a confluence of factors suggests a compelling bullish case for Chinese stocks. Resilient price action, contrarian sentiment, government stimulus, attractive valuations, and rapid AI advancements create immense growth potential.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.