The rapid transformation of China's technology landscape is compelling, particularly that observed in 2023, when the concept of the "F7" emerged, likened to the American tech input "Magnificent 7." This notion started gaining traction among investors and analysts, especially notable within the rising allocations towards sectors driven by innovation in artificial intelligence (AI) and large-scale modelsThe growth in the AI sector, propelled by advancements spearheaded by companies like DeepSeek, has undeniably reshaped the global technology narrative and brought Chinese tech stocks back into the spotlight of capital markets.

Familiar yet novel, the current technological surge evokes memories of the previous bull market that spanned from 2019 to 2021, wherein 5G, semiconductors, and electric vehicles drove a robust tech rallyThe focus then was primarily on hardware and manufacturing attributes, but now it centers on cutting-edge innovations driven by AI and computational powerThis shift illustrates a broader trend of empowerment and autonomy for Chinese technology firms, which are now emerging as formidable players on the global stage.

Currently, the market's trajectory points toward AI, large model discussions, and computing power as the primary growth engines, reflecting a revolution in how industries leverage technologyA significant investment focus has shifted towards the infrastructure behind AI computation, dubbed the "logistics troops" of AI, ensuring the required computational prowess is readily availableCompanies operating at the intersection of AI and diverse sectors—including automotive and healthcare—have also recently begun to see heightened interest and investment activity.

Fund managers are adapting their strategies in light of these two different technological eras, necessitating an understanding of how to approach these evolutions in the investment landscape to maximize returnsThe shift from hardware dominance to a landscape where AI innovation takes center stage marks a crucial transition in China's tech narrative, one characterized by an increasing ability to engage proactively in the global market rather than reacting to external pressures.

Several seasoned fund managers advocate that this transformation reflects years of industrial evolution and technological innovation leading to enhanced capabilities for Chinese firms

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Liu Weiwei, a fund manager at China Europe Fund, emphasizes the importance of the rising "F7" concept and how Chinese technology has begun to shed its traditional manufacturing identity to embrace a more robust tech-driven profile.

In early February 2023, the Chinese stock market saw an impressive surge in technology stocks, coinciding with the emerging notion of the "F7." Huatai Securities was among the first to put forth this comparison, positing that leading companies like Xiaomi, Lenovo, BYD, SMIC, Alibaba, Tencent, and Meituan represent the core assets of China's tech spaceFollowing suit, Haitong Securities echoed similar sentiments, predicting that new tech “seven sisters” would emerge, signaling further growth opportunities in sectors like AI applications and semiconductor manufacturing.

This alignment to America's "Magnificent 7," widely recognized after being introduced in May 2023, reflects the increasing recognition of the capabilities of Chinese tech companies and their potential to compete on the global stageNotably, analysis revealed that a group dubbed “China’s Terrific Ten,” which included ten major Chinese firms such as Alibaba and Tencent, had outperformed their U.S. counterpartsIn an encouraging report, it was revealed that these firms generated a cumulative increase of 77.4% from December 31, 2023, to February 12, 2025, slightly surpassing the 76.6% increase of the U.S. seven giants within the same timeframe.

This performance narrative captured international attention, leading analysts to comment on the extent of Chinese firms' rise in value compared to their U.S. counterpartsWisdomTree's research highlighted this victory, noting the overlooked momentum that had begun as early as mid-2022. Additionally, domestic firms like Citic Securities also embraced the "Terrific Ten" moniker, further legitimizing the industry's burgeoning prominence.

While the "F7" remains an evolving concept without a definitive consensus on its makeup, the phenomenon reflects an overarching narrative of significant change within the global technology landscape

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Such labels are more than just market trends—they signify a shift in industrial architecture vital to the current technological missionThe emergence of AI-driven innovations has garnered renewed investor interest and coupled with the technological breakthroughs led by companies like DeepSeek, has invited an unprecedented level of scrutiny into Chinese tech's advancements.

As observed through the eyes of fund managers like Lin Qingyuan of Ping An Fund, AI's significance was closely linked to a more mature phase of China's technological ecosystemThese firms are not just leading in traditional tech avenues; they are also venturing into spheres that speak to both hardware manufacturing and cutting-edge software applicationsThis integration is an encouraging sign about the capabilities of these companies to innovate and expand globally.

The broader investment community has been notably active as they seek to capitalize on these developmentsFollowing the AI narrative's lead, a notable cadre of funds reported impressive returns, with many exceeding an annual yield of 20%. The data shows that driven by technological equities, particular funds—such as the Penghua Carbon Neutrality and Yongying Advanced Manufacturing—restricted large-scale subscriptions amid soaring demand, reflecting their success in the current investment climate.

Interestingly, fund strategies showcase varying degrees of involvement within this redefined tech landscapeSome had previously shifted their focus toward AI-related sectors well ahead of time, whereas others who did not catch this wave initially have now found ways to adapt and pivot, seizing the opportunity to outperform passive market strategies through an agile approachFor instance, the Oriental Alpha Optimum has managed to secure an impressive percentage of returns, reflecting a significant recalibration of portfolios to align with the burgeoning AI landscape.

The evolution of the tech investment logic is further illustrated by changes in holdings among funds that straddled both cycles of market growth

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