• Strategists expect double-digit gains in MSCI China, CSI 300

• Goldman joins a growing chorus of bullish calls on Wall Street

Strategists at Goldman Sachs Group Inc. expect further gains in Chinese equities, following a blistering rally, as the emergence of DeepSeek sparks optimism over the country’s technological advancements.

Kinger Lau and his colleagues see the MSCI China Index reaching 85 over the next 12 months, up from their previous target of 75. That indicates another 16% rise from Friday’s close. The index has already entered a bull market earlier this month. Their target for the CSI 300 Index was raised to 4,700 from 4,600.

DeepSeek and other Chinese artificial intelligence models have “altered the narrative of China technology, re-rated investors’ optimism about the growth of and economic benefits from AI,” they wrote in a note dated Monday. Widespread AI adoption may boost Chinese earnings-per-share by 2.5% a year over the next decade, they said.

Wall Street investors and analysts are warming up to Chinese equities as DeepSeek’s technological breakthrough spurs a rethink of the market’s attractiveness. Over the past week, strategists at Morgan Stanley, JPMorgan Chase & Co. and UBS Group AG released bullish calls, while Man Group’s head of multi-strategy equities said Chinese stocks are among this year’s highest conviction trades.

“The latest technology breakthroughs are more micro- and innovation-driven in nature,” and may give the recovery more staying power than those that were purely driven by policy, the strategists wrote.

Goldman Sachs has long been optimistic over Chinese stocks, often going against the tide during the market’s multi-year slump. Lau lifted target for the MSCI China in May last year to 70 from 60, but the index steadily slipped in the following months before rebounding late September. In January, Goldman Sachs predicted that Chinese shares could rise about 20% by the end of 2025, a bullish call that proved timely.