4 Stocks From the Tech Industry of China to Keep an Eye On in 2H25
An updated edition of the April 22, 2025 article.China's technology sector is likely to demonstrate remarkable resilience in the second half of 2025, transforming global trade pressure into catalysts for indigenous innovation. Despite facing 145% U.S. tariffs and export restrictions on advanced semiconductors, Chinese technology companies, including NetEase NTES, Alibaba BABA, Taiwan Semiconductor TSM and Tencent Holdings TCEHY, have strategically pivoted their investments toward AI infrastructure and emerging technologies that rival Western counterparts. Taiwan Semiconductor has confirmed that while tariffs create some impact, AI demand remains robust and consistently outpaces supply, demonstrating China's tech ecosystem strength.DeepSeek's emergence as a global AI leader exemplifies this transformation, with the Hangzhou-based startup's R1 and R2 models proving that world-class AI can be developed using cost-effective architectures. Chinese e-commerce giants Alibaba and JD.com recently showcased remarkable momentum during the 618 shopping festival, with electronics and home appliance sales surging 283% and 380% respectively, driven by government subsidy programs, demonstrating strong domestic consumption recovery.
Huawei Technologies continues its impressive comeback with the upcoming Pura 80 smartphone series set for launch on June 11, featuring the advanced HarmonyOS Next operating system that operates independently from Google's Android platform. This represents a significant milestone in China's software sovereignty, while Huawei's Kirin chipsets demonstrate competitive performance against international standards. Industry analysis shows Huawei's Kirin 9020 chip offers 14% higher memory bandwidth compared to Apple's A18 processor, highlighting China's advancing semiconductor capabilities.China's semiconductor industry has strategically dominated advanced packaging technologies, capturing over 25% of the global market share and more than 50% in advanced packaging segments. Technologies like 2.5D and 3D stacking enable enhanced chip capabilities at relatively low costs, demonstrating China's ability to leverage alternative technological approaches to achieve superior performance.
The robotics sector showcases China's engineering excellence, with Unitree Robotics unveiling sophisticated humanoid robots featuring 43 joint motors. China's electric vehicle ecosystem has been strengthened by companies like Zeekr and Great Wall Motor, while suppliers like Hesai reduced lidar costs from $80,000 in 2017 to approximately $200 in 2025. Beijing-based augmented reality companies Xreal and Rokid have introduced sophisticated AR solutions with expansive field views and real-time multilingual translation capabilities. These comprehensive technological advances reflect China's successful strategy, establishing leadership across multiple high-tech sectors while maintaining competitive advantages.We believe that rapid advancements in Chinese technology and huge spending on its development efforts offer significant growth opportunities for investors. Our China Tech Screen is an invaluable source for identifying stocks with massive growth prospects in the space.Explore 30 cutting-edge investment themes with Zacks Thematic Screens and uncover your next big opportunity.
NetEase presents a compelling investment opportunity for the second half of 2025, driven by exceptional financial momentum and a robust game pipeline. The company delivered outstanding first-quarter 2025 results with gaming revenues surging 12.1% year over year to RMB24.0 billion and net income jumping 35% to RMB10.3 billion, demonstrating strong operational leverage. NetEase's diverse portfolio continues to gain traction globally, with Marvel Rivals topping Steam charts, Where Winds Meet reaching 30 million players and multiple titles ranking among top sellers. The upcoming catalyst-rich pipeline includes Sword of Justice's global expansion (already achieving 40+ million players in China), MARVEL Mystic Mayhem to be launched on June 25 and innovative titles like Planet Party Time. NetEase's technological differentiation through AI-powered NPCs and NVIDIA ray tracing partnerships, combined with fair monetization models, positions the company to capture market share. With a strong balance sheet holding RMB137 billion in net cash and multiple high-potential launches scheduled for the second half of 2025, this Zacks Rank #1 (Strong Buy) company offers attractive risk-adjusted returns for growth-oriented investors. You can see the complete list of today's Zacks #1 Rank stocks here.Alibaba's fourth-quarter fiscal 2025 results demonstrate remarkable operational efficiency, with non-GAAP earnings surging 23% year over year to $1.73 per ADS, significantly beating estimates by 16.89%. Alibaba's strategic "user first, AI-driven" approach is yielding impressive results, particularly in its Cloud Intelligence segment, which posted 18% revenue growth while AI-related products maintained triple-digit growth for seven consecutive quarters. The company's robust financial position, highlighted by $50.5 billion in net cash and $16.5 billion returned to shareholders in fiscal 2025, underscores management's confidence and commitment to value creation. Trading at attractive valuations relative to peers despite its technological leadership and expanding AI capabilities across diverse industries, this Zacks Rank #3 company warrants close monitoring for optimal entry points as market sentiment potentially improves in the second half of 2025.Taiwan Semiconductor continues to lead the global chip foundry market, and it's benefiting heavily from the AI revolution. Its manufacturing dominance and scale have made it the go-to partner for advanced chipmaking. Whether it's NVIDIA, Marvell Technology or Broadcom, many top chip designers rely on TSM for producing custom AI accelerators and graphics processing units (GPUs).The company kicked off 2025 with excellent first-quarter results. Revenues surged 35% year over year to $25.53 billion, and net income rose 53% to nearly $11 billion in the first quarter. This growth was powered by the booming demand for its advanced 3nm and 5nm nodes, which now account for 58% of total wafer sales.Taiwan Semiconductor plans to ramp up capital spending to between $38 and $42 billion in 2025 to further capitalize on the AI-driven growing demand for advanced chips. This is a sharp increase from the $29.8 billion spent in 2024, with around 70% earmarked for advanced manufacturing capabilities. Despite higher energy prices in Taiwan, softness in key markets like PCs and smartphones and escalating geopolitical tensions, this Zacks Rank #3 company is worth a watch in the second half of 2025.Tencent reported strong first-quarter results, delivering RMB180 billion in revenues (+13% year over year) with non-IFRS operating margins expanding to 39%, demonstrating operational excellence. Gaming division momentum has significantly accelerated with domestic games surging 24% year over year while Delta Force achieved remarkable success, reaching 12 million peak DAU and becoming the sixth most popular mobile game industry-wide.AI integration is progressing faster than anticipated, with Yuanbao now integrated as a Weixin contact and LLM-powered search driving user engagement, positioning Tencent ahead of competitors in the AI transformation. Marketing Services' robust 20% year-over-year growth reflects the platform's enhanced AI-driven advertising capabilities, while the expanding Weixin ecosystem (1.402 billion MAU) provides an unmatched foundation for future monetization. With a strong net cash position of RMB90.2 billion and continued shareholder-friendly capital allocation through HKD17.1 billion in first-quarter buybacks, this Zacks Rank #3 company demonstrates both growth and financial discipline. Investors should monitor any market volatility in the second half that could provide attractive entry points.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
NetEase, Inc. (NTES) : Free Stock Analysis Report
Tencent Holding Ltd. (TCEHY) : Free Stock Analysis Report
Taiwan Semiconductor Manufacturing Company Ltd. (TSM) : Free Stock Analysis Report
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Bloomberg
28 minutes ago
- Bloomberg
Trump Says Xi to Restart Rare Earth Flows, Sets Date for Talks
Supply Lines is a daily newsletter that tracks global trade. Sign up here. President Donald Trump said his Chinese counterpart Xi Jinping had agreed to restart the flow of rare-earth materials, as negotiators from the two nations prepare to resume trade talks on June 9 in London.
Business Upturn
3 hours ago
- Business Upturn
Populous Acquires Fentress Architects, Expanding Global Aviation Portfolio
Kansas City, Mo., United States: Populous, the world-renowned design firm specializing in sport and entertainment venues, today announced the acquisition of Denver-based Fentress Architects, a global leader in iconic aviation projects and prominent public buildings, including convention centers, museums and government facilities. This press release features multimedia. View the full release here: Los Angeles International Airport. Designed by Fentress Architects. This strategic acquisition unites two of the most respected names in architecture, combining Populous' unparalleled expertise in designing memorable experiences with Fentress' award-winning portfolio of aviation, civic and cultural landmarks. The acquisition significantly broadens the scope and scale of services that Populous can offer clients across the globe. Bruce Miller, Populous Global Chair and CEO, commented: 'We are committed to expanding the breadth of our practice. Fentress Architects has long been known for its visionary aviation and public architecture, exceptional design quality and commitment to innovation. Uniting our aviation team with Fentress to form Fentress Studios, a Populous Company, symbolizes our dedication to design quality. Adding Fentress' expertise and client base to the Populous global aviation and transportation portfolio, as well as synergies across convention center design, will enable us to transform the future of people-centric design and supercharge our global impact in those sectors.' Founded in 1980, Fentress Architects has designed more than $52 billion of architectural landmarks worldwide, including Denver International Airport, Incheon International Airport, Miami Beach Convention Center and the National Museum of the Marine Corps. The firm is known for creating architecture that is sustainable, contextual and deeply connected to the communities it serves. Curt Fentress, Founder and Principal in Charge of Design at Fentress Architects, commented: 'Populous shares our values of design excellence and people-centric thinking. Together, we will continue to redefine great architecture and its capacity to ignite social and economic change through inspired design for people.' Fentress Architects will rebrand as Fentress Studios, a Populous Company, with the studios continuing to be based in Denver and Washington D.C. The acquisition further propels Populous' capabilities in aviation, transportation and public sector design. About Populous Populous is a global design firm that began with a singular focus — to draw people together around the things they love, through experiences that capture all the senses and amplify the pure emotion shared in human moments. Over the last 40+ years, the firm has designed more than 3,500 projects worth over $60 billion across emerging and established markets. Populous' comprehensive services include architecture, interior design, event planning and overlay, branded environments, wayfinding, and graphics, planning and urban design, landscape architecture, aviation and transport design, hospitality and sustainable design consulting. Populous has over 1,500 employees in 32 global offices on four continents with regional centers in Kansas City, London and Brisbane. For more information, visit About Fentress Architects Fentress Architects is an international design firm that passionately pursues the creation of innovative, sustainable, and iconic architecture. The firm's work includes landmarks such as the Tom Bradley International Terminal at LAX, the Ralph L. Carr Colorado Supreme Courts, and the Royal Norwegian Embassy. View source version on Disclaimer: The above press release comes to you under an arrangement with Business Wire. Business Upturn takes no editorial responsibility for the same.
CNBC
3 hours ago
- CNBC
U.S. judge approves settlement allowing NCAA schools to pay athletes
A U.S. judge on Friday granted final approval to a $2.8 billion settlement with the National Collegiate Athletic Association that will allow schools for the first time to compensate student athletes for past and future commercial use of their names, images and likenesses. The settlement, approved in a ruling by U.S. District Judge Claudia Wilken in the Oakland, California, federal court, resolves long-running litigation between the NCAA and student athletes. "Despite some compromises, the settlement agreement nevertheless will result in extraordinary relief for members of the settlement classes," Wilken wrote. She said the deal will "permit levels and types of student-athlete compensation that have never been permitted in the history of college sports." The ruling marked a "historic day for college sports and the rights of athletes," the lead attorneys for the plaintiffs, Steve Berman and Jeffrey Kessler, said in a statement. In a statement, NCAA President Charlie Baker welcomed the judge's ruling. "Student-athletes will benefit from the rich opportunities they enjoy now, plus far more scholarship opportunities, landmark financial benefits and a streamlined NCAA to support them," Baker said. The NCAA denied any wrongdoing in agreeing to settle. The deal faced dozens of objections that it didn't adequately compensate athletes or was unfair in other ways. Objectors to the deal now can appeal to the San Francisco-based 9th U.S. Circuit Court of Appeals. The settlement, covering hundreds of thousands of current and former students since 2016, resolved three lawsuits that claimed NCAA rules barring payments to athletes violated U.S. antitrust law. The $2.8 billion will cover past damages. The plaintiffs' lawyers previously estimated the deal would provide tens of billions of dollars to class members over the next 10 years. Schools will be allowed to pay athletes from funds that universities receive from broadcasts and other commercial sources. The NCAA in April convinced a federal judge in Manhattan to dismiss a lawsuit seeking compensation for thousands of former student-athletes who played team sports in college prior to 2016. Those students have filed an appeal.
