To The Moon

Hong Kong's stock market witnessed a broad-based surge in technology shares on July 9. As of 15:20, the Hang Seng Index had surged over 2.6%, while the Hang Seng Tech Index soared more than 4.3%. Within the sector, AI large language model developers, semiconductors, and internet giants all closed higher, with trading volume significantly expanding from the previous session, indicating a strong recovery in investor sentiment.

Among the gainers, domestic AI model developer Zhipu AI saw its intraday gains peak near 19%, currently trading up nearly 12%. MINIMAX also surged over 19% during the session, demonstrating resilience against selling pressure despite facing a significant share unlock of nearly 45%, which strongly reflects high market recognition for the domestic large model sector.

Internet giants also powered the rally. Alibaba Group Holding Ltd (HKG: 9988) surged 13%, marking its largest single-day gain in nearly a year. Xiaomi Corp (HKG: 1810) and Kuaishou Technology (HKG: 1024) both rose over 8%, while Baidu, Inc. (HKG: 9888) and Lenovo Group Ltd (HKG: 0992) gained close to 9%. Semiconductor stocks also strengthened, with Semiconductor Manufacturing International Corp (HKG: 0981) rising 8.2% and Sensetime Group Inc (HKG: 0020) advancing 7.5%. This triggered gains across the computing power and chip supply chains, resulting in a broad-based rally spanning the entire "large models + internet applications + AI chips" industry.

As of the latest update, southbound capital recorded a net inflow of HK$13.196 billion, with the Shanghai-Hong Kong Stock Connect channel seeing a net purchase of HK$7.766 billion and the Shenzhen-Hong Kong channel attracting HK$6.048 billion. Fund flows were heavily tilted towards the technology sector, with Alibaba, SMIC, Xiaomi, and Kuaishou ranking among the top net buys via southbound trading, indicating mainland capital is actively deploying into AI core assets through the Stock Connect.

Key Catalysts for the Rally

On the policy front, People's Bank of China Governor Pan Gongsheng, speaking at the Hong Kong Fixed Income and Currency Summit and Bond Connect Forum, emphasized deepening financial market connectivity and supporting the prosperity of Hong Kong's capital markets. He stated that capital markets are the core foundation of Hong Kong's status as an international financial center. In recent years, many high-quality mainland companies have listed in Hong Kong to share in China's economic growth. The central bank will continue supporting more quality firms to list and issue bonds in Hong Kong, continuously optimize and expand connectivity in stocks, bonds, wealth management, and interest rate swaps, and deepen financial cooperation in the Greater Bay Area. It will also expand the scale and scope of Bond Connect Southbound Trading, raising the annual net investment quota from the current RMB 500 billion to RMB 800 billion, include southbound bonds in repo support, extend product coverage to Hong Kong dollar and RMB bonds, and extend to the Macau bond market. Furthermore, the country's foreign exchange reserves will continue to increase their asset allocation in Hong Kong, injecting more momentum into the development of its capital markets.

Wall Street's Pivotal Shift

Two recent heavyweight Wall Street research reports signaling a strategic shift served as a key catalyst for fresh overseas capital inflows. A quant strategy report explicitly called for reallocating capital away from global AI assets (excluding China) and reducing holdings in the "Magnificent Seven" U.S. tech stocks, pivoting funds entirely towards Chinese AI-related targets. Simultaneously, Macquarie initiated coverage on five domestic AI chip companies for the first time, using technological autonomy as a key rating criterion, awarding Cambricon Technologies the highest "Outperform" rating.

These reports convey a unified view: persistently high AI capital expenditure in the U.S. has trapped its tech giants in a "high investment, low return" growth trap. In contrast, external technology restrictions have spurred the formation of a fully independent domestic AI industry chain in China. Domestic large models possess a significant cost advantage, coupled with access to the world's largest manufacturing application base, suggesting Chinese AI assets are significantly undervalued.

Additional data from Goldman Sachs further bolstered investor confidence, indicating global fund managers currently allocate only 1.2% of their tech portfolio to Chinese AI stocks—far below the sector's global share of market capitalization and revenue—implying substantial room for increased allocation. The Chief Investment Officer of HSBC Private Bank also stated that A-share and Hong Kong-listed AI hardware and tech stocks have a solid foundation for continued recovery in the second half, making a long-term investment in the complete Chinese AI ecosystem a necessary choice.

The convergence of these views from multiple foreign institutions has prompted a global repricing of Hong Kong's AI tech assets. The expectation of capital migration from U.S. tech stocks towards Chinese AI directly fueled today's bullish sentiment in the Hong Kong tech sector.

Market Outlook and Analysis

Institutional analysis points out that the Hang Seng Tech Index's valuation is currently near a ten-year historical low. Combined with expectations of a marginal easing in the Federal Reserve's tightening stance and global capital rebalancing needs, both foreign and domestic capital are flowing into the market.

In the short term, the collective shift in Wall Street research favoring Chinese AI is expected to continue catalyzing sector sentiment, with large models, AI chips, and computing power infrastructure showing the greatest potential for gains. From a medium- to long-term perspective, the restructuring of the global AI industry division of labor is irreversible. China's fully independent and controllable AI industry chain is poised to continuously attract incremental global capital, suggesting Hong Kong's tech sector may see a sustained, albeit volatile, recovery phase.