After struggling in 2024, China's stock market is roaring as its AI trade soars. Meanwhile, US peers are hobbled by growth concerns and waning enthusiasm.

Meanwhile, cheaper and better alternatives have emerged to accelerate the shift away from US assets. The advent of China’s AI startup DeepSeek has called into question America’s technological dominance, while Germany’s plan to significantly raise spending is being hailed as a watershed moment in European policymaking.

Citi analysts cut their recommendation for U.S. stocks to "neutral" from "overweight" on Monday after recession fears pummelled the market, arguing that the U.S. economy may no longer outpace the rest of the world in the coming months.

Chinese shares look attractive even after their recent rally, Citi strategists wrote, citing DeepSeek’s AI breakthrough and still-cheap valuations.