CBN News, October 13, 2026, 17:33:03 - Listen to the news

Author: Feng Difan Editor-in-Chief: Ge Weier

Recently, Liu Jinjin, Chief China Equity Strategist at Goldman Sachs, and his team released a new report stating that since the “DeepSeek moment” at the beginning of 2025, Chinese artificial intelligence (AI) related listed companies have created a market value of nearly $5 trillion through rising stock prices and IPO. Currently, AI stocks account for 42% of the total market value of A-shares and Hong Kong stocks, and 57% of the total trading volume.

The report also states that China has always been a key exporter in the global AI supply chain, occupying approximately 50% of the global market share in certain areas of AI power and infrastructure. With the advancement of domestic AI technology, China has gradually established an internal circulation AI value chain, which also covers advanced semiconductors, (open-weight) large language models, and the application layer.

Two AI investment main lines

Goldman Sachs stated in its report that it is optimistic about two main investment themes in the Chinese market. Within its equity investment portfolio in China, which includes over 3,000 stocks, there are more than 1,700 companies with a market value of over $100 million. In addition to categorizing these stocks into five different tiers, they can also be divided into two groups based on the geographical distribution of their various sources of revenue.

Among them, the first group includes more than 360 listed companies with a total market value of 1.7 trillion US dollars, which are export-oriented AI companies where overseas revenue accounts for over 40%. In terms of industry focus, these companies are mainly concentrated in the AI infrastructure and power sectors, and are often regarded by investors as representatives of the overseas AI capital expenditure boom.

On the other hand, 'We have identified over 880 companies with a combined total market value of $3.2 trillion, which mainly target the domestic market (with less than 10% of their revenue coming from overseas). In the domestic market, the capital expenditure of leading Chinese cloud service providers such as AI has increased significantly, and the demand and application scenarios for AI are thriving. There is also strong policy support at the government level to promote the autonomy and strength of AI. According to the report, from the beginning of 2025 to June 2026, Chinese AI export companies achieved a cumulative return of 126%, outperforming their domestically oriented peers by 84 percentage points, mainly driven by excellent profitability and growth prospects. However, during the global AI sell-off since the end of June, Chinese AI export companies fell by 23% from their recent highs, giving back about 10 percentage points of their excess returns relative to domestic AI companies. In contrast, domestic AI companies have performed relatively strongly since the beginning of summer.'

"Our top-down return analysis indicates that Chinese AI export companies have a higher return beta to the overall performance of global AI stocks compared to their domestic counterparts, and they are also more closely correlated with geopolitics. However, domestic AI companies are more sensitive to China's local AI capital expenditure trends and policy dynamics, which may provide international investors with diversified investment returns," Goldman Sachs stated in the report.

China's AI Export Leader

Goldman Sachs stated in the report that, similar to its strategically optimistic view on the theme of "going global" for investment, "we believe that Chinese AI export enterprises, as a whole, are poised to further expand their global market share by leveraging their strong cost competitiveness, manufacturing capabilities and efficiency, intensity of R&D investment, as well as their global perspective and execution capabilities."

The report explains: 'From a fundamental perspective, market consensus forecasts that, thanks to accelerated revenue growth and the potential for moderate expansion in profit margins, these companies are expected to experience an average annual compound growth of 42% in earnings over the next two years.'

However, "regulatory/sanctional uncertainties, trade tariffs, and protectionist policies are the main risks facing these companies' ambitions for overseas expansion," Goldman Sachs stated in its report. Therefore, "we believe that Chinese AI export enterprises with the following characteristics are in a more favorable position: they already hold a significant share in global markets (with a lower risk of substitution), experience accelerated growth in overseas revenue (market share winners), possess more defensive technological moats (higher R&D intensity than their peers), have strong capital expenditure discipline (positive free cash flow), are relatively less sensitive to geopolitical uncertainties, and are preferably in non-trade sectors such as biotechnology and pharmaceuticals."

Goldman Sachs also believes that "although geopolitical and trade policy risks still need to be monitored, we remain optimistic about China's AI export leaders. There is a good cost-performance ratio between their growth prospects and valuations. As the local AI ecosystem continues to be built, these companies possess scarce value and can provide diversified investment returns."

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