tech
Chinese stocks are about to get a big AI boost, Morgan Stanley predicts
The investment bank also raised its price targets on two Chinese companies that develop artificial intelligence models.
TL;DR
- Over $1 billion is expected to flow into the Hang Seng Tech Index with the inclusion of AI companies Knowledge Atlas Technology and MiniMax.
- These two companies are set to join the index on June 8, driving passive inflows of $1.25 billion to $1.75 billion.
- Morgan Stanley analysts raised price targets for both Knowledge Atlas and MiniMax, predicting over $1 billion in revenue for each this year.
- AI and large language model companies are expected to become a significant driver of Hong Kong's equity markets, influencing index composition and fund flows.
- The cost of accessing Chinese AI models has risen significantly, now at least 17% of U.S. model costs, up from 5% a year ago.
- Tech IPO fundraising in Hong Kong year-to-date is 40%, with 43% in the pipeline, reinforcing AI's durable force.