An updated edition of the July 18, 2025 article.

Chinese technology stocks, including PDD Holdings (PDD Quick QuotePDD - Free Report) , Tencent Holdings (TCEHY Quick QuoteTCEHY - Free Report) , Bilibili (BILI Quick QuoteBILI - Free Report) and Taiwan Semiconductor (TSM Quick QuoteTSM - Free Report) , are demonstrating remarkable resilience amid unprecedented 145% tariffs and escalating U.S.-China trade tensions in 2025. Despite geopolitical headwinds, breakthrough achievements in AI, semiconductors and electric vehicles position these companies for sustained growth.

AI Revolution Demonstrates Global Leadership

China's AI sector reached a watershed moment with DeepSeek's groundbreaking R1 model disrupting the global landscape. The model matches OpenAI's o1 performance while costing just $5.6 million to train versus tens of millions for its Western competitors, showcasing superior cost efficiency. DeepSeek's open-source approach demonstrates China's innovation capacity despite constrained access to advanced U.S. semiconductors.

The breakthrough wiped nearly $600 billion from NVIDIA’s market capitalization as investors questioned the sustainability of massive AI infrastructure spending. Alibaba Cloud reported 26% revenue growth in the first quarter of fiscal 2026, with AI products maintaining triple-digit growth for eight consecutive quarters.

Semiconductor Sector Achieves Strategic Progress

China's semiconductor industry has showcased remarkable adaptability in navigating Western export controls. SMIC successfully advanced 7nm chip production using deep ultraviolet lithography with multiple patterning techniques, achieving this milestone without banned extreme ultraviolet machines. Reports indicate that SMIC and Huawei are approaching 5nm chip production, narrowing the technology gap with global leaders.

Chinese foundries have maintained 87% utilization rates in 2025, supported by "Design by China + Manufacturing in China" policies. China dominates advanced packaging technologies, holding over 25% of the global market share, and utilizes 2.5D/3D stacking innovations.

Electric Vehicle Dominance Accelerates

The expansion of China's electric vehicle (EV) sector continues in 2025. BYD captured 28.5% of China's new energy vehicle market in May 2025, with over 300,000 monthly units sold. Strategic pricing advantages, with models like the Song Plus at $21,000 versus Tesla's $33,500 average, demonstrate cost competitiveness.

Tesla (TSLA Quick QuoteTSLA - Free Report) experienced an eight-month sales decline in China before recording 0.8% year-over-year growth in June 2025, highlighting the intensity of Chinese competition. BYD's global sales reached 4.2 million vehicles in 2024, surpassing Tesla in total EV sales while expanding manufacturing footprint in Brazil, Thailand and Indonesia to circumvent emerging tariff barriers.

Technology Resilience Despite Trade Uncertainties

China's robotics sector achieved historic milestones with the world's first humanoid robot half-marathon in Beijing, which showcased advanced AI integration. The sector is projected to reach $14.6 billion in market value by 2034, with Chinese companies controlling 63% of global humanoid robot supply chains, per Market Research Future report. Manufacturing robot installations reached 276,288 units in 2023, representing 51% of global installations.

Space exploration achievements include Chang'e-6's successful lunar far-side sample return and breakthrough satellite laser ranging technology. China’s commercial space sector is targeted to reach $344 billion by 2025, supported by robust government investment and rapid private sector expansion, according to a Space Insider report.

We believe that rapid advancements in Chinese technology and huge spending on its development efforts offer significant growth opportunities for investors. Our China Tech Screen is an invaluable source for identifying stocks with massive growth prospects in the space.

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4 Chinese Tech Stocks to Track Right Now

PDD Holdings: This Zacks Rank #1 (Strong Buy) company presents a compelling investment opportunity in 2025, trading at attractive valuations despite temporary margin compression. The company's forward P/E ratio of 12.66 offers a significant discount to intrinsic value, with projected revenue growth of 30-32%, driven by its asset-light structure and aggressive international expansion. PDD's robust $54 billion cash reserves and strategic RMB 100 billion merchant support program demonstrate a commitment to long-term ecosystem dominance. Temu and Pinduoduo, e-commerce platforms owned by PDD, offer deeply discounted prices by cutting out middlemen, but their main difference is their geographic focus. With Temu's global expansion across 86 countries and Pinduoduo's market share gains, PDD showcases an undervalued growth play positioned for sustainable outperformance. You can see the complete list of today’s Zacks #1 Rank stocks here.

Tencent Holdings: This Zacks Rank #3 (Hold) presents a compelling opportunity as China's digital ecosystem leader. The company's strategic AI investments are bearing fruit, enhancing gaming monetization and advertising efficiency while driving double-digit profit growth. Gaming remains resilient with 17% domestic growth, while cloud and fintech segments show promising momentum. Despite regulatory headwinds and elevated capex from AI infrastructure buildout, Tencent's ecosystem advantages, strong cash generation, and leadership in China's digital economy position it well. With shares trading below all-time highs, patient investors should watch this tech giant closely.

Bilibili: This Zacks Rank #3 company presents a compelling opportunity in 2025. Its second-quarter revenues surged 20% year over year to RMB7.3 billion, while the company achieved an operating profit of RMB252 million versus losses last year. Gaming revenues skyrocketed 76%, driven by hit title San Guo, while AI-powered advertising grew 30%. With 109 million daily active users (+7% YoY) and gross margins expanding to 36.5% from 29.9%, BiliBili demonstrates strong monetization momentum. Management targets 40-45% gross margins midterm and 10% operating margins by the fourth quarter. The stock's attractive valuation, combined with accelerating profitability, AI integration and gaming pipeline positions BiliBili as a growth story worth watching in 2025.

Taiwan Semiconductor: This Zacks Rank #3 company delivered stellar second-quarter results with revenues surging 44.4% year over year to $30.1 billion and earnings jumping 60.7%, driven by insatiable AI chip demand. Advanced 7nm-and-below technologies commanded 74% of revenues, showcasing TSMC's technological dominance. Management raised 2025 growth guidance to 30%, supported by robust AI adoption across industries. The company's aggressive $38-42 billion capital expenditure plan and pioneering 2nm technology position it perfectly for sustained leadership. With AI still in early stages and TSMC maintaining 58.6% gross margins despite expansion costs, investors should closely watch this semiconductor powerhouse as the AI revolution accelerates.