Chinese Tech Stocks Plummet: Biggest Drop in 2 Years Amid Weak Earnings, AI Costs

• Chinese technology shares in Hong Kong face their biggest monthly decline since January 2024, with the Hang Seng Tech Index falling almost 10% in February.
• The index is officially in a bear market, down 23% from its October high, driven by weak earnings, increased competition, and shifting investor focus to profitability.
• Profitability and liquidity, not asset quality, are the primary concerns for investors, as companies face pressure on margins and rising costs.
• Mainland investors, previously strong buyers, are now selling billions in Hong Kong dollars, further dampening market sentiment.
• Baidu shares have fallen over 19% this month due to revenue weakness and pressure in its advertising and AI businesses, while investors await upcoming earnings from JD.com and Bilibili.