These 10 Chinese Stocks Drive Global Data Center Expansion
1h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
chinese-stocksdata-centers
Fazen Markets Editorial Desk
Collective editorial team · methodology
Trades XAUUSD 24/5 on autopilot. Verified Myfxbook performance. Free forever.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The majority of retail investor accounts lose money when trading CFDs. Vortex HFT is informational software — not investment advice. Past performance does not guarantee future results.
A select group of mainland Chinese stocks are outperforming global benchmarks due to their critical role in supplying components for data centers, according to a June 28, 2026 report from 22V Research. The firms, specializing in power conversion, cooling systems, and connectivity hardware, have seen valuations rise as demand for artificial intelligence infrastructure accelerates. This trend underscores the integrated nature of the global technology supply chain, where U.S. cloud giants rely on specialized manufacturers in China. The analysis identifies a year-to-date performance gap of over 40 percentage points between these suppliers and the broader Hang Seng Index.
The demand for AI-optimized data centers has created a surge in orders for specialized hardware. These facilities require advanced power supplies, liquid cooling units, and high-speed connectors that exceed the specifications of traditional server farms. Chinese manufacturers have established a dominant position in these niche component markets through years of industrialization and scaling. Their cost competitiveness and manufacturing agility allow them to meet the rapid build-out schedules of major cloud providers.
A key catalyst for the recent stock performance is the recommitment by U.S. tech firms to capital expenditure. Companies like Google, Amazon, and Microsoft have publicly affirmed multi-billion dollar investment plans for 2026 and 2027. This forward guidance provides revenue visibility for their component suppliers, reducing uncertainty for investors. The timing coincides with a maturation of the AI product cycle, moving from research to large-scale deployment.
The last significant rally in this sector occurred during the 2021-2022 global data center expansion, when similar suppliers saw share prices appreciate over 120% within 18 months. The current cycle is distinguished by a sharper focus on energy efficiency and thermal management, areas where several Chinese firms hold key patents. The macroeconomic backdrop of stabilizing U.S.-China trade relations has also alleviated immediate supply chain disruption fears for investors.
The basket of ten stocks highlighted by 22V Research has achieved an average year-to-date return of 54% as of June 27, 2026. This significantly outpaces the 6.5% gain for the Hang Seng Index and the 10.2% rise in the S&P 500 over the same period. The top performers include companies like Shenzhen Invt Electric, which manufactures uninterruptible power supplies, and Suzhou Dongshan Precision, a producer of heat dissipation modules. Their shares have advanced 68% and 71% respectively in 2026.
| Component Category | Example Company | YTD Performance (%) | Primary End-Market |
|---|---|---|---|
| Power Conversion | Shenzhen Invt Electric | +68% | U.S. Hyperscalers |
| Thermal Management | Suzhou Dongshan Precision | +71% | AI Server OEMs |
| Optical Connectivity | Accelink Technology | +49% | Data Center Networking |
Collectively, these ten firms have added over $42 billion in market capitalization since the start of the year. Trading volume for the group has consistently been 30-50% above their 200-day averages, indicating sustained institutional interest. The rally has pushed the average forward price-to-earnings ratio for the basket to 28x, a premium to the broader Chinese technology sector's 19x multiple. This valuation gap reflects growth expectations tied directly to AI infrastructure demand.
The outperformance signals a second-order effect of the AI investment boom, benefiting specialized industrial and hardware companies. U.S. firms like Vertiv Holdings and Eaton Corporation, which compete in similar power and cooling markets, have also seen strong performance, with shares up 35% and 28% YTD. The trend validates the thesis that AI's physical infrastructure requirements are as impactful as its software layer. Flows into the sector are dominated by long-only global technology funds and Asia-focused ETFs rebalancing to overweight positions in industrial technology.
A primary risk to the thesis is potential regulatory intervention. New U.S. tariffs or export restrictions targeting Chinese data center components could sever the supply chain link and impair revenue. The valuation premium also leaves the stocks vulnerable to any disappointment in order bookings or delays in customer capex. A counter-argument suggests that as AI hardware standardizes over time, component margins may compress due to increased competition, eroding the current profitability advantage.
The rally has indirect implications for semiconductor capital equipment makers. Companies like Applied Materials and ASML may see sustained demand from Chinese component manufacturers who are expanding their own production capacity to meet orders. Conversely, generic server manufacturers with less exposure to AI-specific designs may lose market share, pressuring their suppliers. The capital expenditure cycle is creating clear winners and losers across the global industrial landscape.
Investors should monitor the Q2 2026 earnings reports from U.S. hyperscalers, scheduled for mid-to-late July. Guidance on data center capital expenditure for the second half of the year will be a critical indicator for future order flow. Any downward revision could trigger a sharp correction in the supplier stocks. The next China PMI data release on July 1 will provide an updated read on the health of the manufacturing sector.
Key technical levels to watch include the 50-day moving average for stocks like Shenzhen Invt Electric, which has acted as dynamic support during the uptrend. A sustained break below this level on heavy volume would signal a potential trend reversal. For the group, the relative strength index (RSI) is currently near 70, indicating overbought conditions that could lead to short-term consolidation.
The U.S. presidential election in November 2026 represents a significant medium-term catalyst. Policy announcements regarding trade with China could create volatility for the entire cross-border technology supply chain. A decisive move in the U.S. 10-year Treasury yield above 4.5% or below 4.0% would also impact growth stock valuations broadly, affecting the high-multiple Chinese component makers.
The 22V Research report identifies companies like Shenzhen Invt Electric for power conversion units, Suzhou Dongshan Precision for cooling systems, and Accelink Technology for optical connectivity. Other firms in the cohort specialize in substrates, cables, and enclosures specifically designed for high-density computing. These are typically mid-cap industrial technology firms listed on the Shenzhen or Shanghai exchanges, not the large-cap internet names commonly associated with Chinese equities.
Vortex HFT is our free MT4/MT5 Expert Advisor. Verified Myfxbook performance. No subscription. No fees. Trades 24/5.
Trade 800+ global stocks & ETFs
Start TradingSponsored
Open a demo account in 30 seconds. No deposit required.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.