China's technology stocks are losing momentum as investors question whether the AI boom can generate profits high enough to justify rich valuations. The STAR 50 Index, which tracks 50 of the largest and most liquid companies on Shanghai's STAR Market, has fallen more than 40% from its July peak. The sell-off began as profit-taking after a strong rally that accelerated when DeepSeek emerged in early 2025, but has widened into doubts about whether earnings can support current prices. Battery giant CATL, down 37% year to date, illustrates the problem: its third-quarter revenue rose roughly 59% but net profit only about 15%, as competition, product mix and changes to taxes and rebates squeezed profitability. Analysts say a sustained rebound would require stabilizing earnings, clearer returns on AI spending and stronger domestic demand.
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Original headline: China’s tech darlings are losing their shine. Here’s what’s behind the sell-off
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artificial intelligenceChinatech stocksvaluationearnings
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Related tickers and likely impact
QQQ
• NeutralInvesco QQQ Trust
Relevance: low
| Market | US stocks |
|---|---|
| Sector | ETF |
| Close on 10/28/2026 | 725.59 |
| Change that session | +0.60% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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