In a noteworthy turn on February 23, a new collective identity is emerging in global capital markets—the so-called "Ten Giants" of China, rising distinctively following the notable players in the U.S. dubbed the "Magnificent Seven," as well as the "Eleven Knights" in Europe and the "Seven Samurai" in JapanAt the forefront of this transformative phase are China's tech frontrunners, particularly companies like DeepSeek, which are spearheading substantial investments in artificial intelligence (AI). Simultaneously, legacy giants like Alibaba are channeling significant resources into tech innovations, prompting major international financial firms like Morgan Stanley, JPMorgan Chase, and Goldman Sachs to advocate for investment in Chinese assets.

This week has witnessed landmark achievements for notable Hong Kong-listed companies like Alibaba, Semiconductor Manufacturing International Corporation (SMIC), Tencent, and BYD, all of which have reached unprecedented market highsThe Hang Seng Tech Index has also surged, marking its highest level in over two years, boasting an impressive cumulative rise of approximately 30% since the beginning of the year—leading the pack in global equity performance.

A report released by Laura Wang's team at Morgan Stanley on Wednesday underscored a significant shift in outlook towards the Chinese stock market, particularly its offshore venturesThe report notes a structural transformation within the market, predicting that technical advancements are likely to sustain the momentum of the Chinese stock rallyThe A-share market is projected to offer broader opportunities in tech stocks, particularly as foreign ownership levels remain historically low, paving the way for potential gainsIn the short term, offshore markets are expected to outperform, benefiting from innovations and shareholder value returns.

Alibaba has emerged as a frontrunner among these "Giants." Recently, its earnings calls have been largely centered on AI, overshadowing traditional discussions of e-commerce performance

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Analysts are now focused on understanding the company's capital expenditures and future investments for AI—indicative of a shifting paradigm where AI is at the core of investor interest.

During a recent earnings call led by CEO Wu Yongming, substantial commitments were outlined for AI and cloud infrastructure over the next three years, pledging to surpass the total investments of the past decadeSpecific targets set that year indicated a heightened focus on three distinct areas within AI, aiming particularly towards achieving artificial general intelligence (AGI).

As the market collectively reacts, significant upward adjustments have been made to Alibaba's target share prices across major Wall Street firms, with JPMorgan increasing its target from $125 to $170, Citigroup also adjusting from $138 to $170, while Goldman Sachs raised its targets to $160 and HKD 156. HSBC followed suit, revising from HKD 125 to HKD 156.

A report from Huaxin Securities on February 21 elucidated that prior to this latest bullish trend, China's core technology assets—including Alibaba—have historically suffered from systemic undervaluationFor instance, Alibaba's valuation lingered below a 20x price-to-earnings ratio, starkly contrasting with the valuation levels in the tech sector in the U.SThis oversight in valuing its e-commerce against its AI and cloud computing operations is becoming increasingly addressed with DeepSeek igniting excitement around tech investments, catalyzing a revaluation of Chinese tech assets on the Hong Kong market.

This emergence of the "Ten Giants" also brings into play a competitive dynamic, where the landscape reveals a vigorous rivalry against the established "Magnificent Seven." With AI increasingly becoming a focal point for Alibaba, can the new "Ten Giants" carve a niche for themselves and challenge the dominance of these established U.S. tech powerhouses?

Market observers suggest that many global economies are nearing peaks at present, but China's market remains under-exploited, making investment there a countercyclical strategy that could yield robust returns

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Commenting on this, Jeff Weniger, the head of securities strategy at WisdomTree Investments, highlighted the growing perception that China can attain a leading edge in the AI domainHe noted how companies like BYD and Geely are vying against Tesla, while Alibaba and JD.com challenge Amazon's supremacy.

This sentiment was recently reinforced when Weniger circulated a graphic that captured the competitive essence of the Chinese "Ten Giants" eclipsing the "Magnificent Seven" in the U.S. marketIdentifying Alibaba, Tencent, Meituan, Xiaomi, BYD, JD.com, NetEase, Baidu, Geely, and SMIC as the contenders, he succinctly remarked that the "Magnificent Seven" are yielding their position to these emerging giants amidst the less stellar performance of Silicon Valley counterparts over recent months.

According to Haitong Securities, China's tech "Seven Sisters" are on the brink of ascensionMacro perspectives indicate that the foundational aspects for technological growth—ranging from human resources to supportive policies—are firmly in placeThe current environment in China's financial markets provides favorable conditions in terms of policy, funding, and overall market climate and points toward a transition from bear to bullAreas like AI applications, semiconductor manufacturing, and high-end equipment are set to flourish and potentially reveal the next wave of technology leaders among China's best.

Meanwhile, earlier this month, Huatai Securities emphasized that the "Seven Sisters" of American tech, which includes industry leaders like Apple, Google, Amazon, Microsoft, Meta, Tesla, and Nvidia, have solidified their positions through consistent growth and innovationWith the introduction of DeepSeek, capital is rapidly transitioning to Hong Kong, as investors are closely assessing potential Chinese counterparts to the U.S.’s "Seven Sisters."

The optimistic outlook from Wall Street is substantiated by tangible capital flows into the Chinese market

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Eva Lee from UBS Global Wealth Management observed that international investors are actively returning to strengthen their positions in ChinaThe International Institute of Finance (IIF) reported a net inflow exceeding $10 billion into Chinese stocks and bonds from foreign investors, marking a notable return since August of the previous year.

Recent revelations highlighted that Ryan Cohen, the CEO of GameStop and a notable figure in the meme stock arena, has increased his stake in Alibaba to $1 billion, roughly 7 million sharesThis confidence underscores a belief in the long-term economic potential of ChinaFurthermore, billionaire investor David Tepper's Appaloosa LP recent filing with the SEC unveiled substantial acquisitions of Chinese stocks and ETFs (exchange-traded funds) in the last quarter.

As we transition from the narrative of the “Four Horsemen” to the FAANG companies, and subsequently to the "Magnificent Seven," the global capital markets are reframing their attention toward the emerging "Ten Giants" in ChinaWith DeepSeek setting a new benchmark for tech investment, it raises a pivotal question: in the AI epoch, will we witness a reconstruction of the technological power framework?

As Chinese tech firms begin to assert themselves on the global stage and innovation translates into tangible business growth, the journey of value discovery initiated by the re-evaluation of these assets may be opening new avenues for narratives to unfold.