Two economies, one awkward split
Goldman Sachs’ Kinger Lau is basically saying China is running on two different operating systems right now: consumers are still dragging their feet, but AI is sprinting ahead like it just had three espressos.
That matters because the internet giants listed in Hong Kong have been stuck in a weird investor no-man’s-land. They’ve had the AI buzz, sure, but the market has wanted something sturdier than vibes and PowerPoint slides. A real earnings inflection in Q3 could be the missing ingredient.
Why investors should care
If these companies start showing that AI is actually boosting profitability — not just inflating conference calls — the market may finally be more willing to pay up for the story.
- Better earnings = better proof that the AI spend is earning its keep
- Higher confidence can mean richer valuations
- A calmer geopolitical backdrop helps, too, even if it’s not exactly sunshine and rainbows
The catch
The consumer side of the Chinese economy still looks sluggish, so this isn’t a blanket “China is back” moment. It’s more like: the AI parts of the market may be getting stronger while the rest of the engine is still coughing a little.
Big picture: investors don’t need perfection — just enough evidence that AI can turn into actual earnings. That’s often how a narrative goes from “interesting” to “please take my money.”