China’s tech sector stumbled in Q4 2024, with the Hang Seng Tech Index plunging 30% year-over-year—the worst quarterly performance in three years. Weak demand, escalating costs, and regulatory headwinds battered profits, erasing investor hopes for a post-DeepSeek rebound. Alibaba and Tencent, two tech giants, signaled aggressive AI spending plans—$53 billion and $5.2 billion respectively—yet analysts warn returns remain unclear. JPMorgan and BNP Paribas analysts caution that margin pressures and “anti-involution” policies may fail to curb price wars in e-commerce and EVs, leaving stocks like Alibaba “rangebound.”