JPMorgan upgraded Chinese technology stocks on the basis of lower risks just two months ago calling the sector “uninvestable.”

U.S. Investment analysts raised their ratings on seven Chinese Internet companies including Tencent, Alibaba, Meituan, NetEaseAnd PinduoduoFrom “underweight” up to “overweight.” They believe that these stocks could be more profitable than the average return on stock investments over the following six- to twelve months.

Alex Yao, the bank’s China Internet analyst and his team stated Monday that “significant uncertainties” should be alleviated due to recent regulatory announcements made earlier than anticipated.

According to the bank, digital entertainment and local service will “be the first batch of outperformers”.

The JPMorgan analysts stated, “We believe that key risks have diminished to the sector, particularly regulatory risk and ADR-delisting risk.

Yao and his team stated in March that they considered this sector uninvestable for six to twelve months. Bloomberg later report was published in error.CNBC reached out to Yao at JPMorgan for comments on Bloomberg’s claims.

Even before the bank’s March call, Chinese internet stocks were already taking a beating — hammered by months of regulatory uncertainty and worries over supply chain disruptions from the mainland’s strict zero-Covid policy.

At Monday’s close, Hang Seng Tech, which monitors the most Hong Kong-listed tech stocks, had dropped more than 27%.

The tech sector has been affected by concerns about a rising interest rate as central banks try to control inflation. Future earnings of growth companies are less appealing if rates rise.

Tech-heavy Nasdaq CompositeWall Street fell more than 25% as of Monday night’s closing