China’s ‘juicy’ AI gains are in hardware, not the benchmark indices

Timothy Moe of Goldman Sachs argues that China’s equity market is effectively split into ‘three Chinas’, with offshore software-heavy indices lagging while onshore and AI-linked hardware stocks surging. He adds that the strongest earnings momentum is concentrated in smaller tech hardware segments, where improving fundamentals are beginning to improve the risk-reward profile even for some beaten-down offshore names.