By Nigam Arora
China internet ETF KWEB has moved up nicely since the last post. Going forward, there are four positive factors:
- In The Arora Report analysis, Chinese AI stocks are relatively inexpensive compared to U.S. AI stocks.
- Chinese models are cheaper than U.S. models. For some tasks, Chinese models are up to 80% cheaper than the U.S. models. Barring interventions by governments, Chinese models are likely to gain market share.
- Chinese AI stocks are getting a boost from Apple’s (AAPL) decision to use Alibaba’s (BABA) Qwen large language model along with AI technology from Baidu (BIDU). Both BIDU and BABA are in ETF KWEB.
- Chinese AI stocks are also getting a boost from anticipation of China’s AI Conference, which begins Friday and includes a keynote from President Xi.
The negative is that, right now, U.S. AI stocks are getting hit. The negative sentiment from the U.S. could carry over to China.
Zones and Ratings
The buy zone is *** (To see the locked content, please take a 30 day free trial). As of this writing, KWEB is trading at $27.50.
The short term rating is a ***.
The medium term rating is ***.
The long term rating is ***. The reason the long term rating is *** is due to the risk of China attacking Taiwan. If it were not for the Taiwan risk, the medium-term and long-term ratings would be a strong buy.
What To Do Now
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This post was just published on ZYX Emerging Alert.
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Nigam Arora
Nigam Arora is known for his accurate stock market calls. Nigam is a distinguished master of the macro. He is a popular columnist with over 100 million page views, an engineer, and nuclear physicist by background. Nigam has founded two Inc. 500 fastest growing companies and has been involved in over 50 entrepreneurial ventures. He is the developer of Theory ZYX of Successful Change Management and is the author of the book on Theory ZYX, as well as the developer of the ZYX Change Method for Investing.
