Investors are flocking to Chinese markets in a search for alternatives to U.S. equities. DeepSeek’s AI breakthrough earlier this year proved that China could compete on the technological frontier. Economists are betting that Beijing might finally unleash more stimulus to revive flagging domestic consumption. And policy volatility in Washington, thanks to U.S. President Donald Trump’s trade war, is pushing investors to start diversifying their portfolios away from the U.S.
It’s a big shift from earlier arguments that Chinese companies were “uninvestable” due to concerns about policy uncertainty and China’s sluggish economy.
Hong Kong’s benchmark Hang Seng Index is up by over 20% so far this year, even as Trump threatened steep tariffs on imports from China. By comparison, the S&P 500 is up by around 2%.
Investors have used the “Magnificent 7”—Microsoft, Apple, Alphabet, Amazon, Meta, Nvidia, and Tesla—as shorthand for the top-performing stocks on U.S. markets. These seven companies both reflect U.S. strength in Big Tech and tap into major trends like AI.
But what about China?
Investment bank Goldman Sachs, in a report released last week, highlighted 10 stocks that are best poised for growth in the Chinese market. Together, they make up what the bank calls the “Prominent 10”, or “Prom 10” for short. Unlike the Magnificent 7, these stocks cover more than just tech and AI, extending into retail and other consumer services.
Together, the stocks amount to $1.6 trillion in market value, according to Goldman Sachs, compared to $19 trillion for the Mag 7. The bank predicts that the Prom 10’s earnings will grow by an average of 13% annually over the next two years.
The Prom 10 “collectively embody the theme of AI/Tech development, self-sufficiency, ‘Going Global’, services and new forms of consumption, and China’s improving shareholder returns,” Goldman Sachs wrote in its report. The bank also suggests that its chosen companies have more opportunities to expand and consolidate their positions in the more fragmented Chinese economy.
Who’s on the Prom 10?
The most valuable company on the Prom 10 is Tencent, one of the world’s largest video game publishers and operator of the ubiquitous WeChat messaging app. Tencent’s superapp is one of a handful of platforms that boasts over a billion users. Valued at around $585 billion, Tencent is Asia’s second-most valuable company, behind chipmaker TSMC.
E-commerce giant Alibaba is also on the Prom 10. Shares in the company are up more than 35% so far this year, thanks to optimism around AI. Developers both inside and outside of China are embracing the company’s open-source Qwen model, making Alibaba the AI leader among the country’s big tech companies.
Meituan, China’s food delivery giant, is another Prom 10 stock. The company holds a 70% market share in the delivery space, and is expanding to new markets like Hong Kong, Saudi Arabia, and Brazil. Yet the stock has taken a beating in recent weeks due to fierce competition from JD.com, another e-commerce giant.
BYD, the world’s largest producer of electric vehicles, and Xiaomi, a major Chinese smartphone brand that’s recently expanded to cars, also hold spots in Goldman Sachs’ “Prom 10.” Chinese EVs are quickly winning over customers both in China and overseas, due to the affordable price points and appealing designs. That’s helped boost the shares of both companies: BYD and Xiaomi are up by around 45% and 60% respectively.
Midea Group is one of China’s leading manufacturers of home appliances and another Prom 10 stock. The company debuted on Hong Kong’s stock exchange last year, raising almost $4 billion.
Tencent, Alibaba, Meituan, Xiaomi, BYD, and Midea are all on Fortune’s Global 500, which ranks the world’s largest companies by revenue.
Rounding out the Prom 10 are NetEase Games, the second-highest grossing gaming company in China; Hengrui, a leading pharmaceutical manufacturer; Trip.com, a travel booking platform; and ANTA, the world’s third-largest sportswear company, behind Nike and Adidas.
