STOCKS | Goldman Sachs Keeps Overweight Call on A-Shares, Recommends Positioning in Hong Kong Internet Leaders

Goldman Sachs said it is maintaining an overweight stance on China’s A-share market and recommended gradually positioning in high-quality internet leaders listed in Hong Kong.

According to Jin10, Goldman Sachs said market divergence has been extreme this year, with A-share “hard tech” significantly outperforming Hong Kong-listed internet stocks. The bank judged that the overall AI sector in A-shares does not show signs of a bubble, but said valuations in some sub-sectors such as semiconductors are relatively high and investors should watch for risks tied to overly concentrated trading.

Goldman Sachs said Hong Kong internet stocks have seen a short-term rebound and that current share prices have already fully priced in pessimistic expectations, including losses from AI investment and pressure on core businesses. It added that as subsidies narrow and monetization of cloud and AI applications accelerates, earnings in the second and third quarters are expected to reach an inflection point.

On flows, Goldman Sachs said hedge funds are heavily positioned in the South Korean and Taiwanese markets, while emerging-market funds have begun to overweight China.