BEIJING: Chinese artificial intelligence (AI) firms have emerged as one of the most volatile pockets of Asia’s equity markets, with shares of newly listed model developers and chip designers swinging on retail flows.
Half of the region’s top 10 most volatile stocks based on 90-day annualised volatility are recent initial public offerings (IPOs) from the sector, according to Bloomberg calculations for firms valued above US$10bil.
Moore Threads Technology Co, for example, soared more than 700% in five days before nearly halving, while AI model developer MiniMax Group Inc climbed more than 500% since its January debut.
Chinese stocks – especially those listed in Hong Kong – are no stranger to speculative swings.
But the recent surge in volatility has been amplified by thin institutional ownership and the frenzy around all things AI.
The swings could intensify as some companies move toward inclusion into trading links with onshore exchanges, opening the door for mainland investors who are even more inclined to quick, momentum-driven trading.
“All these new AI stocks are almost entirely valued on their AI roadmap. That means their earnings and sentiment are highly sensitive to the whole AI story in China,” said Jasmine Duan, senior investment strategist at RBC Wealth Management Asia.
“There is risk in chasing the rally because some of their business models are not proven, and change can be quite rapid.”
The latest hype around China’s token consumption highlights just how extreme those moves can be.
Investors are starting to bet that token sellers like MiniMax and Knowledge Atlas Technology JSC Ltd, known as Zhipu, are best positioned to benefit from the rising demand for tokens – which measures data units processed by AI models for generating text and other inputs.
Exchange data show that institutions required to disclose their holdings account for just 9.3% of MiniMax’s shares, with the remainder held by individuals and non-reporting investors.
Among Asia’s five most volatile stocks – four of them newly listed Chinese firms – institutional ownership averages 13%.
By contrast, they own about half of Tencent Holdings Ltd and Alibaba Group Holding Ltd.
In March, MiniMax stock’s average intraday percentage move was 14 points, while Zhipu had a 13-point high-to-low change. That compares with just 3.6% for Alibaba.
Bloomberg Intelligence forecast that MiniMax and Zhipu will deliver revenue growth of more than 150% year-on-year in 2028. — Bloomberg
