Chinese Tech Stocks Enter Bear Market Amid Tax Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 05 2026
0mins
Should l Buy MORN?
Source: CNBC
- Market Pullback: Hong Kong-listed tech stocks entered bear market territory on Thursday, with the Hang Seng Tech Index falling over 1% and down more than 20% from its October peak, indicating a decline in investor confidence amid global risk aversion.
- VAT Concerns: Market participants highlighted fears of a potential increase in value-added tax on internet services as a key trigger for the recent decline, especially following the implementation of VAT on certain telecom services, which heightened sensitivity to policy risks.
- Sector Outlook: Despite the sharp sell-off in tech stocks, some investors view this as a healthy correction rather than the onset of a deeper downturn, suggesting that the recent weakness is concentrated in sectors that had previously outperformed.
- Fundamental Support: While near-term positive catalysts appear lacking, some asset managers assert that the fundamental outlook for Chinese tech stocks has not materially deteriorated, with supportive valuations and potential earnings rebounds, alongside AI developments that may provide future catalysts.
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Analyst Views on MORN
Wall Street analysts forecast MORN stock price to rise
2 Analyst Rating
2 Buy
0 Hold
0 Sell
Moderate Buy
Current: 169.700
Low
250.00
Averages
285.00
High
320.00
Current: 169.700
Low
250.00
Averages
285.00
High
320.00
About MORN
Morningstar, Inc. is a provider of independent investment insights in North America, Europe, Australia, and Asia. Its segments include Morningstar Data and Analytics, PitchBook, Morningstar Wealth, Morningstar Credit, and Morningstar Retirement. The Morningstar Data and Analytics segment provides investors comprehensive data, research and insights, and investment analysis to empower investment decision-making. The PitchBook segment provides investors with access to a broad collection of data and research covering the private capital markets. Morningstar Wealth segment brings together its model portfolios and wealth platform; practice and portfolio management software for registered investment advisers; data aggregation and enrichment capabilities; and others. Morningstar Credit segment provides investors with credit ratings, research, data, and credit analytics solutions. The Morningstar Retirement segment offers products designed to help individuals reach their retirement goals.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Optimistic Earnings Forecast: Analysts expect Micron's adjusted earnings to grow 13% annually through fiscal 2029, making the current valuation of 16 times adjusted earnings reasonable, with a median target price of $550 per share implying a 56% upside from the current price of $352.
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See More
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- Rising Inflation Expectations: With rising energy and food prices, investors are increasingly concerned that inflation will remain above the Federal Reserve's 2% target, particularly affecting those nearing retirement who face eroding purchasing power, prompting a reassessment of portfolio strategies.
- Inflation-Protected Bonds: Treasury Inflation-Protected Securities (TIPS) have emerged as a tool for combating inflation, with inflows recorded in 12 out of the last 13 months, indicating strong demand from investors seeking asset protection, despite the inherent price volatility risks associated with these bonds.
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