With the Nasdaq Golden Dragon Index surging overnight, optimism about Chinese stocks is building fast — led by Goldman Sachs and many other Wall Street analysts.
On Wednesday, Goldman Sachs raised its 12-month target for the MSCI Emerging Markets Index from 1,190 to 1,220, driven by the positive impact of artificial intelligence applications on Chinese corporate profits. Their latest forecast shows the index still has 12% room to rise from Tuesday’s close.
Goldman Sachs strategists, including Sunil Koul, expect Chinese stocks to keep climbing as stimulus measures stabilize economic growth. Improved growth prospects in the eurozone have also contributed to the raised target price for the emerging market benchmark index.
Goldman Sachs also noted their preference for the “less exaggerated” valuations of onshore A-shares, signaling further confidence in the Chinese market.
Chinese Stocks Rally Across the Board
On Wednesday, Chinese stocks saw widespread gains, with the Nasdaq China Golden Dragon Index closing up 6.4% — its highest level since October last year. Leading tech giants soared:
- Alibaba: +8.6%
- JD.com: +6.8%
- Manbang: +13.8%
- Pinduoduo: +6%
- Baidu, Bilibili: +5%+
Three Bullish Catalysts for Chinese Stocks
Despite ongoing US-China trade tensions, Andrew Rocco, an analyst at Zacks Investment Research, pointed to three major bullish catalysts driving Chinese stocks higher:
- Increased Fiscal Stimulus:
The Chinese government has been injecting funds into the economy since last year, and recent data shows the pace is accelerating. On Wednesday, China announced more fiscal stimulus measures and set its 2025 economic growth target at 5%. - Earnings Growth Resumes:
Chinese companies’ earnings per share (EPS) are bouncing back. Alibaba, for example, experienced stagnant growth from late 2020 to early 2023, but has now returned to growth. Zacks analysts predict record-high EPS for Alibaba in 2025 and 2026.More evidence of China’s economic recovery is expected as major companies like Futu Holdings, Apple, Walmart, and JD.com report earnings in the coming days. - Potential Tariff Easing:
While tariffs generally have a negative impact on both the US and China, analysts believe Trump may use them as a negotiating tool. Since Chinese stocks have remained resilient despite current tariffs, any future easing could trigger a strong market rally.
Market Confidence Strengthens
UBS managing director Vey-Sern Ling commented on China’s latest economic targets, announced at the country’s “Two Sessions” meetings:
“There’s nothing to nitpick. Just having a strong growth target and a clear intention to support the economy should reassure markets.”
As bullish sentiment grows, Chinese stocks appear well-positioned to continue their upward trajectory — fueled by fiscal stimulus, strong earnings growth, and the potential for tariff resolutions.
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