This Chinese AI Stock Breaks Out With Uniquely Bullish Signal

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This Chinese AI Stock Breaks Out With Uniquely Bullish Signal

investing ideas :: 2025-01-31 :: source - ibd

By SCOTT LEHTONEN

(Pixabay)

Chinese fintech and artificial intelligence leader Qifu Technology (QFIN) climbed to new highs the past week and boasts a bullish chart signal. The Chinese AI stock is one of the best names to watch on Investor's Business Daily's Stock Spotlight screen.

Qifu is a leading credit technology platform in China. It connected 162 financial institutional partners and 254.3 million consumers with potential credit needs as of Sept. 30.

In its latest quarterly report, issued Nov. 19, Qifu said it earned $1.76 per share on sales of $622.7 million. That's year-over-year increases of 78% and 6%, respectively. The sales growth increase was in line with the previous quarter, while earnings growth ramped up for a second straight quarter. Accelerating quarterly earnings growth is a hallmark of stock market winners.

"As a tech-driven company, we are committed to leveraging AI (artificial intelligence) and large language models to empower our business and improve both the user experience and operational efficiency" Chief Executive Haisheng Wu said on the earnings call with analysts. The company upgraded its AI co-pilot system, achieving an accuracy rate of 98.8% in key information extraction for loan collection.

"This AI co-pilot system has been deployed across various collection scenarios, including user information identification and case tracking, enabling our collection team to more effectively pinpoint critical information and promptly follow up on cases," Wu added.

For the full 2024, Qifu's earnings are expected to jump 47% to $5.64 per share, with an increase of 11% in 2025, per IBD MarketSurge.

Chinese AI Stock Hits Buy Point

Last Monday, shares of Qifu Technology broke out past a 40.31 buy point in a flat base, according to the IBD MarketSurge pattern recognition tool. The 5% buy zone runs up to 42.33, so the AI stock was moving out of buy range Thursday.

The stock's relative strength line made a new high during the breakout. That triggers the RS Line Blue Dot signal.

When a stock's RS line hits a new high while the stock is forming a base or breaking out, then the Blue Dot appears on the MarketSurge weekly or daily chart. Remember, the RS line measures a stock's price performance vs. the S&P 500 and is the blue line on every IBD chart.

If the market is trending down, good stocks will outperform just by treading water. When the market rebounds, the stocks with best relative strength should bounce back even stronger than the market.

IBD Stock Checkup shows that Qifu stock owns a near-perfect 98 IBD Composite Rating. That makes the Chinese AI stock one of the best names to watch right now.

Be sure to follow Scott Lehtonen on X at @IBD_SLehtonen for more on the Dow Jones Industrial Average, the stock market today and the best stocks to buy and watch.

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