Expectations are rising that China could eventually lead the artificial intelligence race against the United States, prompting a shift towards Southeast Asian AI stocks. <\/p>\n
The performance gap between US and Chinese AI models has narrowed, with US producing 40 notable models in 2024 versus China\u2019s 15. <\/p>\n
A significant cost difference in China\u2019s favour has led to US startups, such as Airbnb, preferring Chinese models like Alibaba’s Qwen AI, over more expensive US counterparts. <\/p>\n
Alibaba has seen its stock surge by over 90% in 2025, driven by investment in AI infrastructure and the widespread adoption of its models. <\/p>\n
Baidu, another key player, has grown by over 40%, is expanding its AI-powered robotaxi operations, and looks set to boost its revenue further. <\/p>\n
Tencent has leveraged its early AI adoption to make strides in various sectors, from healthcare to gaming, becoming a key AI leader. <\/p>\n
JD.com has used AI to boost its eCommerce services and remains a major player with potential for further growth. <\/p>\n
iFlytek is focusing on voice recognition and R&D, expanding its market reach into Europe for further growth opportunities. <\/p>\n
China’s AI industry presents numerous investment avenues with the potential for significant development into 2026 and beyond.<\/p>\n
The momentum behind cheaper, effective Chinese AI models is a clear signal for us to adjust our strategies. Following Alibaba’s massive 90% run-up in 2025, its implied volatility is likely elevated. Instead of buying expensive outright calls on BABA, we should consider selling cash-secured puts at strike prices below the current market to either collect premium or acquire the stock on a potential pullback.<\/p>\n
For Baidu, the story is about its specific catalysts like the robotaxi expansion into new markets like Hong Kong and Dubai. This targeted growth makes bull call spreads an attractive, risk-defined way to play anticipated positive news flow in the coming weeks. Recent data showing the global robotaxi market size projection was revised upward again in late 2025 supports this bullish, yet cautious, approach.<\/p>\n
Tencent’s broad integration of AI across stable sectors like gaming and fintech presents a different opportunity. Given its massive scale, we see it as a candidate for income generation through covered call strategies on existing long positions. Data from last quarter showed its AI-driven fraud detection on WeChat Pay cut fraudulent transactions by over 25%, reinforcing the value of its embedded AI and making it a solid underlying asset for such a strategy.<\/p>\n
We also need to consider the broader geopolitical risks of this US-China AI race. The renewed talk of chip restrictions from the US Commerce Department in late 2025 is a real threat that could impact the entire sector. A prudent hedge would be to buy puts on a broad semiconductor ETF, like the SOXX, to protect our long Chinese AI positions from any sudden policy shifts.<\/p>\n
Looking at iFlytek as a potential catch-up play, its focus on R&D suggests future catalysts are on the horizon. Long-dated call options, known as LEAPS, could be a way to position for a potential breakout later in the year without committing significant capital upfront. This allows us to benefit if its planned European expansion, mentioned last quarter, gains traction and starts to impact its revenue growth.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" China’s AI gains, cost advantages, and rising tech stocks shift investor focus from U.S. to Southeast Asia.<\/p>\n","protected":false},"author":62,"featured_media":16966,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-38302","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/38302","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=38302"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/38302\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16966"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=38302"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=38302"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=38302"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}