China’s AI-driven stock rally is drawing support from Wall Street strategists, who say the newfound tech prowess will help extend a bull run.

Strategists from Morgan Stanley, JPMorgan Chase & Co., UBS Group AG and more expect stock gains spurred by DeepSeek’s artificial intelligence model to continue. The global shock and awe over the Chinese startup has spurred a fundamental rethink over the market’s attractiveness, challenging previous assumptions that the nation is lagging behind in cutting-edge technologies.

Here is the view of Wall Street:

JPMorgan

JPMorgan strategists including Rajiv Batra noted that fund flows into Chinese internet names have been positive this year, with a surge following the DeepSeek shock. “We see a window of opportunity in Asia over the coming months, with another tactical rally in China driving upside,” they wrote.

Morgan Stanley

“Global investors are starting to reassess China’s investability within the tech and AI space, after an extended period of limited attention,” Morgan Stanley strategists including Laura Wang wrote in a note dated Tuesday. “We expect the momentum to sustain in the near-term given global investors’ light positioning.”

Goldman Sachs

Goldman Sachs expects Chinese breakthroughs in AI development and application "could materially alter" the stock market trajectory.

The Wall Street bank estimates AI-enabled efficiency improvement could increase earnings by 2% for Chinese equities, while brighter growth prospects could lead to a 20% valuation uplift for Chinese firms, narrowing the gap with U.S. peers.

China's "hard tech" stocks trade at a price representing 23.6 times earnings, while "soft tech" shares trade at 13.9. The price-to-earnings ratio of the biggest U.S. tech stocks, the so-called "Mag 7", is 31, showed the Goldman report dated Feb 4.

Deutsche Bank

Chinese stock gauges will top prior highs in the medium term as the world wakes up to the competitiveness of its companies, according to Deutsche Bank.

The artificial-intelligence product DeepSeek and innovation in electric vehicles will serve as catalysts for global money to return to Hong Kong and Chinese stocks, analyst Peter Milliken wrote in a note. Chinese companies across a range of sectors are delivering products that are often better than those from rivals and aren’t sufficiently recognized for it, he said.

“We think 2025 is the year the investing world realizes China is outcompeting the rest of the world,” Milliken wrote. “Investors we believe will have to pivot sharply to China in the medium term, and will struggle to get access to its stocks without bidding them up.”

UBS

Based on the experience during the 4G, 5G and cloud computing eras, “it would seem that we are less than halfway through the rally” driven by DeepSeek, UBS strategists including James Wang wrote in a note dated Wednesday. Ample liquidity and lower interest rates should help AI-related names to further re-rate, they added.

HSBC

HSBC said the valuation gap between China and emerging markets may narrow, as foreign fund inflows pick up amid a growing awareness of the nation’s technological prowess.

“In addition, A-share tech companies may also benefit from policy support,” Steven Sun, head of research at HSBC Qianhai Securities Ltd., wrote in a Feb. 6 note. “The missing link is that innovation in China has yet to be translated into higher profitability, which can only be solved through demand-side stimulus.”

Bank of America

Bank of America Corp. strategists expect US stock-market outperformance to continue to fade after a relentless run was halted in the early part of 2025.

They recommend being long Chinese equities as they’re not expecting an escalation of the trade-and-technology war with the US.