(Bloomberg) — Chinese technology stocks fell as traders took some money off the table following a rally driven by optimism over the country’s artificial intelligence potential.
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The Hang Seng Tech Index (HSTECH.HK) ended Thursday 0.9% lower, reversing an earlier advance that briefly saw the gauge reach a three-year high. The index pushed lower as shares of Alibaba Group Holding Ltd (BABA, 9988.HK) — the latest AI darling — trimmed gains to just 2.6%.
Thursday’s setback may do little to dent insatiable demand for the sector, after the rise of Chinese AI startup DeepSeek has sparked a hunt for beneficiaries from the country’s advancement in large language models.
“The Hong Kong stock market has been on a long upward trend, but today we finally see some signs of profit-taking,” said Dickie Wong, executive director of research at Kingston Securities Ltd. “For AI concept stocks, short-term profit-taking is pretty normal.”
The Hang Seng Tech Index reached overbought territory Wednesday based on the 14-day relative strength index, data compiled by Bloomberg show. The gauge entered a bull market last week.
Alibaba trimmed gains Thursday upon confirmation that Apple Inc. is working with the e-commerce pioneer to roll out AI features in China — an event that had driven the stock in recent sessions.
—With assistance from Sangmi Cha.
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