Bernstein is looking at Chinese internet tech stocks like it’s the downtrodden days of Covid-19. “For all the justified consternation around geopolitics and trade headwinds, we think the mantra of ‘fade sentiment extremes’ still applies,” Bernstein China internet analyst Robin Zhu and a team said in an April 14 report. “Several of the other conditions that marked prior bottoms in the China internet sector now apply again,” they said, pointing out that valuation multiples have mostly fallen back to the lows seen in the 2021 to 2023 period. Tighter government regulation on Chinese internet businesses and the Shanghai lockdown in 2022 had weighed heavily on investor sentiment. But as Beijing ramped up its stimulus announcements in recent months and signaled more private sector support — especially with the advent of DeepSeek’s artificial intelligence breakthrough — Hong Kong’s Hang Seng Index broke a four-year losing streak in 2024 and kicked off 2025 with a strong start. “Looking across global markets, we can’t help but feel the rate of regulatory change Stateside feels mildly reminiscent of China in 2021,” the Bernstein analysts said, noting China’s current policy stance now appears more predictable in contrast. “Within our [China internet] coverage, video gaming feels like the sector most insulated from trade and macro headwinds, while digital ads might even be benefitting from me …
