On the AI Rollercoaster, China Stocks Show Mixed Perseverance

Chinese stock markets weathered the rough seas of shifting sentiment on the cost and impact of artificial intelligence, with mixed results for February.

The tech-focused ChiNext index in Shenzhen fell 1.1 percent in the month, while the benchmark Shanghai Composite Index gained 1.1 percent and the Shenzhen Component Index added 2 percent.

In Hong Kong, the benchmark Hang Seng Index lost 2.8 percent in February, and its Tech Index each slumped 10 percent in its worst monthly decline in two years.

"It is a testing time for market sentiment and investor confidence," said Wang Kai, an analyst with Guosen Securities. "Tech companies are vulnerable to capital fluctuations, and they need so-called 'patient capital' for long-term investment."

Tech shares globally were roiled by a two-day, 8-percent drop in Nvidia's share price despite the AI chip leader reporting a 73-percent surge in quarterly revenue and doubled net income.

"People may be adjusting their investment strategies, and tech companies need to do something to resume people's confidence in new technologies," Wang said.

For the week, the Shanghai Composite Index rose 1.98 percent in the four trading days after it reopened following the nine-day Chinese Lunar New Year holiday. The Shenzhen Component Index advanced 2.8 percent and ChiNext gained 1.05 percent.

All eyes are on corporate earnings and the upcoming "Two Sessions" plenary meetings that start on March 4, where the nation's growth target for 2026 and other major policies will be announced.

On the earnings front, three of this year's hotter Shanghai-listed chip startup stocks managed to eke out gains despite global tech concerns, after the companies reported strong 2025 revenue growth. Shares in Cambricon, often called "China's Nvidia," rose 0.8 percent on Friday after the company reported net profit of 2.1 billion yuan (US$301 million), its first annual profit since listing in 2020, and revenue growth of 450 percent. Moore Threads, which listed in December, rose 0.4 percent after posting a 243 percent surge in revenue to 1.5 billion yuan, with its loss narrowing to 1 billion yuan. MetaX Integrated Circuits, also rose 0.4 percent following its announcement of a 121 percent increase in 2025 revenue to 1.6 billion yuan, with its loss reduced from a year earlier to 781 billion yuan.

Shanghai shares in graphics processing unit maker Hygon Information rose 3.3 percent after the company reported 2025 net profit surged 32 percent. Baidu shares in Hong Kong lost 19 percent in February. The China tech giant announced on Thursday that net income in the fourth quarter plunged 66 percent and revenue grew only 4 percent. Trip.com shares in Hong Kong rose 2.8 percent after the China-based largest online travel service provider in the world reported that net income in the last three months of 2025 almost doubled.

Elsewhere in Asia, Japan's Nikkei rose 3.6 percent last week, and South Korea's Kospi surged 7.5 percent.

In New York, the major markets dropped on Friday amid renewed concerns about the impact of AI and a bigger-than-expected rise in US producer prices. The Nasdaq closed down 0.9 percent, and the broader S&P index lost 0.4 percent. For the month, both indexes ended in the red. Fintech company Block stirred unease after announcing it will lay off half its workforce in favor of using AI applications. Nvidia fell 4 percent.

Gold and oil prices shot up amid renewed concerns that the US is about to attack Iran, after US President Donald Trump voiced dissatisfaction with progress in nuclear talks and said he would prefer not to use force "but sometimes you have to." Spot gold was up 0.8 percent at US$52.30 in late trading in New York, and benchmark Brent crude rose 2.5 percent to US$72.52.