Analyst Identifies Hesai and Alibaba as Undervalued AI Plays

Market analyst Thomas Yeung identifies Hesai Group and Alibaba Group Holding Ltd. as undervalued opportunities within the artificial intelligence sector. Yeung argues that the current AI expansion differs from previous market bubbles because the demand for cloud computing capacity currently exceeds available supply.

Hesai Group has consolidated the lidar sensor market, supplying a majority of global robotaxi companies and robotics firms such as Unitree Robotics. Despite this position, the company faces challenges from customer concentration and U.S. trade barriers. Alibaba Group Holding Ltd. is positioned as a leader in China's AI cloud computing market, utilizing vertical integration across chip design, data centers, and its Qwen family of AI models to compete with global peers.

Regarding the robotics sector, Unitree Robotics experienced an initial surge of 629% upon listing on the Shanghai Stock Exchange. Yeung warns investors against buying into the hype surrounding such surges, citing China's specific trading rules and subsequent price drops.