China's AI stock rally is now a year old, up tens of percent across major indices - and DeepSeek V4 is expected to launch around Feb 17

Been following the China tech space closely since DeepSeek's R1 model dropped in January 2025 and caused Nvidia to lose $600 billion in a single day. What's interesting is that while everyone focused on the Nvidia carnage, Chinese tech stocks have been on a tear that most Western investors seem to be ignoring. The numbers are pretty striking. Chinese stocks added roughly $1.3 trillion in market cap following the DeepSeek announcement. The Hang Seng Tech Index is up 23% in 2025. But here's what really caught my attention - Cambricon Technologies, the domestic AI chip company that makes chips DeepSeek's models can actually run on, just reported revenue up 44x year over year and swung from a 533 million yuan loss to over 1 billion yuan in profit in the first half of 2025. The stock roughly doubled over the past twelve months (from \~CNY 520 to \~CNY 1,037 as of early February), though it peaked at CNY 1,596 in August 2025 before correcting sharply. If you zoom out to two years, the gain is closer to 10x from its 2024 lows. Worth noting the stock just crashed 13% in a single day on Feb 3 after social media rumors about weak 2026 revenue guidance - the company denied it, but it lost over CNY 77 billion in market cap in three trading days. Volatility in this name is extreme. The thesis here is that DeepSeek's V3 model natively supports domestic chips including Huawei Ascend, Cambricon, and Hygon. This is significant because it means the entire AI inference stack can now run on Chinese hardware. ByteDance and Tencent are reportedly testing Baidu Kunlun and Cambricon chips as alternatives. What makes this more interesting is the rumor mill around DeepSeek's next model. Reports suggest R2 was originally planned for mid-2025 but got delayed because founder Liang Wenfeng wasn't satisfied with performance. The delay was partly due to difficulties training on Huawei's Ascend chips, which is kind of ironic given the whole point was to reduce dependence on Nvidia. But just this week DeepSeek published a new paper on a training method called "Manifold-Constrained Hyper-Connections" that analysts are calling a breakthrough for scaling larger models. Some think this could form the backbone of their V4 model. DeepSeek has a pattern of dropping papers right before major releases. There's also talk of a next-gen AI agent that could launch in Q1 2026, apparently capable of executing multi-step tasks autonomously. If they pull off another DeepSeek moment with a new model, it could trigger another leg up in these names. The challenge for US investors is that pure-play exposure to this theme is limited. KWEB is mostly internet stocks with zero A-share exposure. CQQQ has some onshore names but only about 34% A-share weight due to inclusion factor caps. The real action in names like Cambricon is happening in the A-share market where most US investors can't easily access. I recently came across CNQQ which has about 50% A-share weight and actually holds Cambricon, CATL, and other hard-tech names that the internet-focused funds miss entirely. Still pretty new so liquidity is something to watch, but the exposure is much closer to the AI infrastructure theme. Curious how others are thinking about positioning for what could be another catalyst if DeepSeek drops something new.