Why is the Hang Seng Tech Index underperforming while AI shares soar?
South China Morning Post
by Themis QiFebruary 23, 2026
AI-Generated Deep Dive Summary
The Hang Seng Tech Index has been underperforming this year despite the surge in artificial intelligence (AI) shares, leaving investors puzzled. Comprising 30 technology-related companies like Tencent Holdings and Alibaba Group Holding, the index dropped 5.5% up to Friday, reversing some of last year’s impressive 23.5% growth. In contrast, the broader Hang Seng Index has gained 0.3%, highlighting a stark divergence in performance between tech-focused and general market indices.
Analysts suggest that the underperformance stems from challenges in balancing the AI boom with selecting strong industry leaders. While AI stocks have surged due to their potential to drive innovation and growth, not all companies on the Hang Seng Tech Index are capitalizing on this trend effectively. This mismatch has led to investor skepticism, as some firms struggle to adapt to rapidly evolving technologies or face regulatory scrutiny.
The broader implications of this underperformance matter for global investors and market watchers. The tech sector’s struggles in Hong Kong could signal broader trends affecting similar markets worldwide, including regulatory changes and the difficulty of identifying future winners in AI-driven industries. For readers interested in global economic trends, understanding these dynamics offers insights into how emerging technologies are reshaping traditional markets and challenging established benchmarks.
This situation also underscores the importance of careful stock selection in tech-heavy indices, where not all companies may keep pace with market shifts. As AI continues to dominate headlines and investment strategies, the Hang Seng Tech Index’s ability to adapt and reflect true innovation will be crucial for its long-term success. Investors and analysts alike will closely monitor whether these companies can bridge the gap between hype and performance in the coming months.
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Originally published on South China Morning Post on 2/23/2026