- As expectations rise for the U.S. and Iran to return to the negotiating table and geopolitical risks diminish, global risk assets are undergoing structural recovery. The Nasdaq Composite Index has recorded a ten-day rise since 2021, and the S&P 500 Index is nearing historic highs, driving overall risk appetite upward in the Asia-Pacific market. The Hang Seng Tech Index (HSTECH:HK) has become one of the core targets for capital inflow.
- Leading tech stocks in the Hong Kong market displayed active intra-day performance. JD.com (9618:HK) recorded a gain of over 5%, while Alibaba (9988:HK) and Baidu (9888:HK) rose by over 4%. Renowned hedge fund manager Michael Burry disclosed increased positions in JD.com and Alibaba, with stakes of 6% and slightly less, respectively, indicating a reassessment of valuations for Chinese concept stocks by overseas institutional funds.
- Breakthroughs in underlying AI technology and accelerated commercialization constitute the core driving force of the fundamentals of tech stocks. Nvidia (NVDA:US) released an open-source quantum AI model, and Alibaba's multi-modal model topped the global rankings. Meanwhile, domestic cloud service providers have intensively reduced computing power prices within the month, and Hong Kong's IPO market's single-quarter financing surged by 504% to $14 billion, indicating that capital activity in the primary market and real industries is concurrently recovering.
Risk Appetite Recovery and Index Performance
The easing of geopolitical events has provided a macro window for the redistribution of global liquidity. In recent weeks, shipping disruptions in the Hormuz Strait and risk premiums on the oil supply side temporarily pushed capital markets into a risk-averse mode. However, as U.S. officials signaled the nearing end of conflicts, risk pricing in the energy market has started to systematically withdraw. Morgan Stanley's analysis indicates that the market's re-evaluation of private credit and macro uncertainties has essentially been completed. In this shift of sentiment, the Hong Kong tech sector, previously constrained by high-risk-free rates and liquidity discounts, has swiftly absorbed arbitrage funds flowing from defensive assets thanks to its historically low valuation levels.
Institutional Fund Reallocation and Fundamental Reassessment
There are substantial signs of a replenishment in foreign institutional asset allocation towards Chinese internet giants. Michael Burry's position-building has sent a clear contrarian trading signal to the market, asserting that JD.com's current stock price has a high margin of safety. Huatai Securities (HTSC:CH) further supports this logic, noting that the profit-making capability of leading Hong Kong tech enterprises has surpassed a turning point. Against the backdrop of industry-wide capital expenditure slowdown and promotion of cost reduction and efficiency, the market's consensus on the growth in earnings per share (EPS) for 2026 has exceeded 40%. If companies can continue to deliver on profit margin improvement guidance in the second quarter, the Hang Seng Tech Index is expected to see simultaneous recovery in valuation and performance.
Computing Power Cost Game and Primary Market Revival
The iteration of artificial intelligence technology is profoundly altering the balance sheet structure of tech companies. During cycles of intensive releases of large models like GPT-5.4-Cyber and Tencent Hunyuan 3.0 both domestically and abroad, the underlying computing power cost is a key variable that restricts the commercial rollout. The recent consecutive pricing adjustments by the three major domestic cloud service providers—Baidu, Tencent, and Alibaba—are essentially an attempt to sacrifice short-term cloud business gross margins to secure long-term market share in the AI ecosystem. Meanwhile, the strong recovery of Hong Kong's primary market provides robust liquidity support for hard technology enterprises. More than 500 companies focused on strategic fields such as semiconductors and artificial intelligence are in the pipeline for listing, and the $14 billion financing scale in the first quarter has constructed a foundational support for the long-term asset supply of the Hong Kong tech sector.
