UBS has narrowed down its Chinese artificial intelligence plays to two leading companies. With several mainland companies having had a chance to monetize generative AI in the past two years, leaders and laggards are now emerging. “We favor AI-driven and alpha growth names with strong execution,” a team led by the investment bank’s Hong Kong-based strategist Eva Lee wrote in a report earlier this month. “We believe that the sector … has not fully priced in growth prospects yet.” “China’s internet leaders are accelerating AI monetization, backed by domestic chip development and LLM innovation,” the analysts said, referring to advancements in the large language models powering generative AI. Alibaba, Tencent Based on positive second-quarter results in late August, the UBS analysts favor U.S.-listed Alibaba and Hong Kong-traded Tencent in the AI category. Alibaba shares are up 83% in the U.S. for the year so far, while Tencent’s have gained more than 54% in Hong Kong. The pair have outperformed their Chinese internet rivals Baidu and JD.com , whose U.S.-listed shares are up by 36% and down by 3%, respectively, year-to-date through Friday. Shares of food delivery provider Meituan are down by more than 36% in Hong Kong in 2025. Alibaba is the “largest AI enabler in China with full-stack AI cloud infrastructure,” the UBS analysts said. As for Tencent, it’s likely to benefi …
