2 Chinese Stocks With Big Upside

"Chinese stocks might have gone from uninvestable to worth exploring, given the discounted valuations to be had on a number of internet stocks, many of which are making huge splashes in AI. Undoubtedly, the AI race isn't just among firms within the U.S. markets; it's a global one, and one that may very well see China sit in a number-two spot that's not all too far behind America."

"Undoubtedly, hardware independence comes with the territory, and while that could mean cutting Nvidia ( NASDAQ:NVDA) out of the equation, even though the U.S. has approved the chips to be sold in China with a 25% surcharge. In any case, China's AI innovators are moving rapidly, and they're arguably heavily, while exploring workarounds (think efficiencies) to maximize bang for the buck, even with AI accelerators that may not be the very best in class."

Chinese internet stocks are trading at discounted valuations and offer AI upside as many companies are active in generative AI. The AI race is global, with China potentially close behind the United States across models and hardware. China pursues hardware independence and explores efficiency workarounds to mitigate reliance on top GPUs and U.S. export limitations, including a 25% surcharge on approved chips. Chinese firms train models on domestic chips, exemplified by Zhipu AI using Huawei hardware. Resource constraints drive creativity and could produce major breakthroughs outside the U.S. Alibaba and other internet giants hold large datasets and cloud capabilities that can accelerate applied AI deployment.

Read at 24/7 Wall St.