Semiconductor Manufacturing International Corp (SMIC) saw its stock price surge 6.94% in intraday trading on Thursday, outperforming the broader Hong Kong market. This rally came amid growing investor optimism towards Chinese technology companies that are currently trading at steep discounts compared to global peers.

The catalyst for SMIC's surge appears to be the recent success of Chinese artificial intelligence startup DeepSeek. As investors reassess China's AI and tech capabilities in light of DeepSeek's achievements, they are piling into undervalued Chinese tech stocks like SMIC. On Thursday, SMIC was among several such firms like BYD Electronic, Horizon Robotics, BYD, Kingsoft Cloud, and Li Auto that saw significant share price gains.

With an average price-to-earnings ratio of just 20.5 times compared to over 40 times for US tech giants like Nvidia and Apple, analysts argue Chinese tech stocks are severely undervalued given their innovation potential. The rebound in these stocks may signal a shift in sentiment as the AI boom narrows the perceived gap with Silicon Valley.