Since the emergence of DeepSeek, a transformative AI technology, the global stock market has undergone significant shifts, with the technology sector, especially Chinese tech stocks, showing remarkable performanceThis groundbreaking achievement in artificial intelligence not only marks a substantial technological leap but has also stirred considerable waves in the commercial and capital marketsAs a result, it has become a vital catalyst for the rise of China's technology sector.

For years, the American tech giants, often referred to as the "Magnificent 7"—which includes Apple, Microsoft, and Nvidia—have dominated the global tech industry through their superiority in hardware, software, AI, and ecosystem creationThe core principle that has guided their success is a combination of cutting-edge technology, large-scale commercialization, and a closed-loop ecosystemFor example, Nvidia has defined the AI era with its powerful GPU offerings, while Tesla has revolutionized the automotive industry through intelligent automationLikewise, Microsoft and Google are reshaping corporate productivity through cloud computing and AI.

However, with breakthroughs in foundational technologies like DeepSeek, the Chinese tech industry is starting to mirror this successful logic, gradually dismantling the dual barriers presented by hardware and algorithms.

Recently, Huatai Securities introduced for the first time the idea of the “China Tech 7,” which includes Xiaomi, Lenovo, BYD, Semiconductor Manufacturing International Corporation (SMIC), Alibaba, Tencent, and MeituanThese seven companies span critical areas such as hardware manufacturing, cloud computing, semiconductors, intelligent terminals, and local services.

The underlying logic of the “China Tech 7” can be understood as a dual-driven approach combining hard tech with AI in practical applicationsUpon closer examination, we find that these seven companies share certain defining traits: an increase in technological independence, rapid global expansion, and business transformation driven by AI

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Although the collective market cap of this Chinese counterpart still lags behind the US giants, its untapped potential in the fields of AI applications, electric vehicles, and the domestic semiconductor market may serve as a new rationale for global capital to bet on Chinese technology.

The success of the Magnificent 7 in the US rests on their “control over underlying infrastructure”—for instance, Nvidia’s cutting-edge GPUs and Microsoft’s cloud operating systems set global technology standardsConversely, the path to success for Chinese tech giants emphasizes a dual strategy: breakthroughs in hard technology coupled with practical applications across various scenarios.

The first thrust involves hardware advancements: companies like SMIC are enhancing mature process capacities, BYD is excited about vertical integration in electric vehicle manufacturing, and Xiaomi is strengthening its smart ecosystem to reshape the geographical distribution of the global supply chain.

The second thrust focuses on AI applications: Tencent is developing social AI assistants, Meituan is advancing its unmanned delivery systems, and Lenovo is innovating with AI PCs, all of which translate advanced large model technologies into productivity tools aimed at cutting costs and boosting efficiency.

Furthermore, the data and ecosystem barriers established by Alibaba Cloud's Tongyi Qianwen open-source ecosystem and Tencent's WeChat social network form local data fortifications.

This synergy of “technology—application—ecosystem” may well enable Chinese tech giants to take a quantum leap in the AI era.

Take Lenovo as an example; among the companies listed in Huatai Securities' “China Tech 7,” Lenovo has a particularly unique positioningNot only is it the leading hardware giant in global PC shipments, but it also plays a crucial role in AI infrastructure and solution servicesYet, based on current valuations, Lenovo appears to be one of the most undervalued AI enablers.

Currently, Lenovo's price-to-earnings ratio stands at a mere 12.7 (2025E), significantly lower than global leaders in AI hardware such as Nvidia, which boasts a ratio of 29.5. This undervaluation stems from the market's lingering perception of Lenovo as just another "traditional PC manufacturer," overlooking its two major growth potentials: the certainty of an AI-driven upgrade cycle and the incremental market expansion brought about by model lightweighting.

The recently introduced DeepSeek R1 model, with its enhanced inference efficiency and reduced computational costs, accelerates both edge AI capabilities and the deployment needs of AI in businesses

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This aligns perfectly with Lenovo Group's mixed AI strategy put forth in 2023. Lenovo is well-positioned to bridge the gap between individual and enterprise-level needs for intelligent upgrades, serving as a key enabler in making AI more accessible.

According to Huatai Securities, following the rollout of DeepSeek, both enterprises and individuals will find it easier and less costly to implement AI solutions, with Lenovo likely to benefit as a core player in edge AI deploymentWhile the DeepSeek-R1 model may not yet run smoothly on regular laptops, it functions effectively on more powerful PCs (for instance, it can operate a massive model with 671 billion parameters if paired with an Nvidia RTX 6000 that offers 48GB VRAM). If the future of specific AI applications starts to permeate various industries by 2025, a surge in demand for high-performance computers is expected as numerous researchers deploy models on their PCsIDC projects Lenovo's market share to reach 23.5% in 2024, maintaining its status as the global leader in PC shipments, thereby benefiting from the edge deployment trend.

The commercialization of AI large models like DeepSeek is poised to stimulate enterprises to ramp up their IT investments, leading to steady growth in shipments of Lenovo's enterprise products such as servers and storage solutionsLenovo's robust supply chain and cost-control prowess allow it to efficiently cater to the long-tail demands of small and medium-sized enterprises for edge AI inference without requiring top-tier computational power.

Huatai Securities forecasts that by 2025, Lenovo's enterprise business revenue growth may exceed 15%, making it a key engine for profit growthLooking ahead to 2025, it might be essential for Lenovo to shift its valuation perception from being merely a "hardware manufacturer" to recognizing its potential as the "king of edge AI".

This new landscape in the AI market presents a fresh hierarchy of influenceThe triumph of America’s Magnificent 7 has its roots in the virtuous cycle of "defining technology standards—monopolizing global markets—reinvesting capital into R&D". The emergence of China's “tech giants” signifies a promising alternative—through leveraging domestic supply chain advantages coupled with innovative applications, they aim to reshape the global tech landscape in the AI era.

Lenovo's evolving narrative encapsulates a crucial trend: the next wave of tech giants may not necessarily emerge from the labs of Silicon Valley; they could very well stem from factories in Shenzhen, cloud computing data hubs in Hangzhou, or electric vehicle assembly lines in Hefei

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