On May 13 local time, amid divergent performances among the three major U.S. stock indices, the Chinese concept stock sector witnessed a significant collective rebound. The Nasdaq Golden Dragon China Index surged 3.89% throughout the day, hitting an intraday high of nearly 4% before closing near 7289.61 points. This performance marked one of the index’s largest single-day gains recently, standing in sharp contrast to the relatively flat broader market trend where the Dow edged lower while the Nasdaq and S&P 500 posted modest gains.
At the individual stock level, the rally displayed broad-based momentum, with technology leaders and artificial intelligence-related concepts performing particularly well. GDS Holdings shares soared 25%, briefly breaching a 30% gain to lead the charge; Kingsoft Cloud and Hesai Technology jumped 17% and over 12% respectively, signaling capital favor towards cloud services and lidar sectors. Alibaba shares opened low but recovered strongly, closing up more than 8%. Major platform enterprises including JD.com, Baidu, and NIO all gained over 7%, while Li Auto, Bilibili, Weibo, and iQiyi recorded varying degrees of significant growth. Assets such as Meituan, Pinduoduo, and Beike also demonstrated robust performance.
The core driving force behind this rally primarily stems from earnings signals from leading internet enterprises. Alibaba’s pre-market release of its fiscal year 2026 fourth-quarter and full-year earnings report indicated that while core profits declined slightly, external commercial revenue growth for Alibaba Cloud reached 40%. Annualized recurring revenue from AI models and application services is projected to exceed 30 billion yuan by the end of the year. Group CEO Wu Yongming emphasized during the conference call that the return on investment for relevant initiatives over the next three to five years will become clear, noting that AI infrastructure investment scale will far surpass the previously announced 380 billion yuan. Meanwhile, Tencent also released positive signals during its earnings communication, stating that demand for AI-related services continues to grow this year. Capital expenditure in the second half will increase compared to the previous year, and computing power capabilities are expected to improve month by month with the deployment of domestic chips. The simultaneous scaling efforts by these two giants have been viewed by the market as a sign that the industry is returning to an expansion cycle.
Notably, this surge in Chinese concept stocks occurred against a backdrop of macroeconomic headwinds. On the same day, data from the U.S. Bureau of Labor Statistics showed that the April Producer Price Index skyrocketed 6% year-on-year and jumped 1.4% month-on-month, with surging energy prices being the main driver. The comprehensive rebound in inflation pressure has weakened expectations for Federal Reserve rate cuts. Although market expectations for maintaining high interest rates have strengthened, and the Senate has approved the new Federal Reserve chair candidate, Chinese concept stocks still chose to strengthen independently. Analysts suggest this indicates that investors are shifting focus to corporate AI capital expenditure cycles and profit prospects rather than simply following macro sentiment fluctuations.
With tech giants clarifying their AI investment roadmaps, the valuation logic for Chinese internet companies is transitioning from traffic monetization to AI-driven growth. If subsequent quarterly reports from more companies demonstrate similar progress, the overall valuation repair potential for the sector may expand further. Influenced by the U.S. stock market close, Hang Seng Tech Index futures rose nearly 3% in the overnight session, with markets closely monitoring the transmission effects following the Hong Kong stock market opening.
