Goldman Sachs raises target for Chinese stocks amid AI boom
Goldman Sachs upgrades China stocks, citing AI-driven earnings growth
Goldman Sachs has increased its 12-month target price for Chinese stocks, citing the potential of artificial intelligence (AI) adoption to significantly boost corporate earnings and attract as much as $200 billion in capital inflows.
The announcement comes as Chinese tech stocks rally, marking their strongest winning streak in over two years. Investor sentiment has been bolstered by DeepSeek’s AI breakthrough, which has reignited optimism about China’s technological competitiveness and its ability to capitalize on the global AI race, reports Reuters.
Revised Projections for Key Indexes
As part of its updated outlook, Goldman Sachs raised its target for the CSI 300 index, which tracks major Chinese blue-chip stocks, from 4,600 to 4,700. It also increased its target for the MSCI China index—which includes both Hong Kong-listed and U.S.-listed Chinese stocks—from 75 to 85.
Despite these upward revisions, the CSI 300 index was last trading at 3,954, still far below Goldman’s new projections, suggesting significant room for further gains if AI-driven momentum continues.
AI Boom Fuels Market Optimism
The investment bank’s bullish stance reflects growing expectations that AI will drive productivity gains across multiple sectors, boosting corporate profits and attracting global capital. China has made significant investments in AI and semiconductor development, positioning itself as a major player in the global technology race.
However, risks remain, including ongoing regulatory uncertainties, geopolitical tensions with the U.S., and concerns about China’s broader economic recovery. These factors could limit the pace of stock market gains despite AI-related optimism.
Goldman Sachs’ forecast comes at a time when global investors are cautiously re-entering Chinese markets, looking for growth opportunities amid AI advancements and government stimulus efforts. The coming months will be crucial in determining whether China’s AI-driven rally can sustain its momentum.
Reminder, Goldman Sachs strategists expect a limited upside for European stocks in 2025, forecasting a modest 4% price increase and a 7% total return, down from 10% last year.
