Chinese Tech Stocks Outperform Nasdaq with 41% Surge in 2025 on AI and Chip Momentum

Chinese technology stocks have mounted a remarkable recovery in 2025, with the Hang Seng Tech Index soaring 41% year-to-date—more than double the Nasdaq's 17% gain. The rally reverses years of regulatory pressure, fueled by breakthroughs in artificial intelligence and semiconductor independence.

DeepSeek's globally competitive AI model ignited the rebound, lifting giants like Alibaba (+96%), Tencent (+55%), and Baidu (+60%). Domestic chip development accelerated as Baidu expanded its Kunlun processors and Alibaba secured telecom contracts for its T-Head chips, coinciding with Beijing's ban on Nvidia purchases.

Investors are rediscovering value in Chinese tech as valuations remain below historical peaks. The sector's resurgence reflects both technological maturation and strategic decoupling from Western supply chains.