“We do expect the second quarter to mark the bottom in growth for our companies,” Ronald Keung, head of Asia Internet research at Goldman Sachs Group Inc. said in a Bloomberg TV interview. “Depending on the Covid policies and the government’s policies in helping to drive back consumption confidence, we do expect easier comps for China tech companies particularly as you enter into September and December quarter.”

Investors are also hoping the more than a yearlong crackdown on private enterprise is approaching an end. Policy makers have been vowing support for the industry as part of their effort to support a slumping economy.

After slumping to a record low in mid-March, the Hang Seng Tech gauge has seen short bouts of recoveries as policy optimism attracted dip buyers. Still, it remains down more than 60% from a February 2021 peak as investors struggle to reach consensus on whether the sector is set for a sustainable rally.

“Street estimates for Chinese tech appear to be more pessimistic than reality. That coupled with the easing crackdown and stimulus measures should provide a base for these shares to rally,” said Justin Tang, head of Asian research at United First Partners in Singapore.

The Nasdaq Golden Dragon China Index of Chinese firms trading in the U.S. jumped 7.6% on Thursday. Hong Kong’s tech gauge was up 3.6% as of 11:23 a.m., while the benchmark Hang Seng Index gained 2.8%. China’s CSI 300 Index climbed 0.6%.

Still, traders remain wary that fresh virus outbreaks and Beijing’s adherence to a Covid Zero policy may roil further market upside. Any policy support may also be gradual, with Tencent Holdings Ltd. executives warning last week that it will take time for Beijing to act on promises to support the sector.

Technology shares no longer enjoy high growth, “so there will only be range-bound trading going forward,” said Steven Leung, executive director at UOB Kay Hian. BM