UBS: European Investors Remain Confident in China's AI Sector

According to Jin10, UBS China Equity Strategy Research Head Wang Zonghao stated that European investors maintain strong confidence in China's AI sector. Following a week-long meeting with European investors, Wang noted that despite the summer break, interest in Chinese stocks remains high, with AI being a key discussion topic. While some AI tech stocks have declined in recent weeks and some investors have taken profits amid volatility, confidence in the AI tech sector remains firm. Investors are primarily focusing on themes related to China's localization and domestic capital expenditure, as well as sector leaders with reasonable valuations. Compared to previous surveys, investors' understanding of China's AI tech supply chain has broadened, but UBS believes there is still room for further penetration. European investors are also paying attention to potential disruptions from China's AI models. As China ramps up efforts in AI capabilities and related infrastructure, allocating part of investment portfolios to China's AI supply chain is reasonable over the long term. Beyond AI, investor interest in China's biotech sector has exceeded expectations, possibly as they seek under-explored areas of Chinese innovation and diversify beyond AI. Given the extremely low valuations of China's internet sector, investors also agree with UBS's view that internet stocks can serve as defensive stocks.