Billionaire investor David Tepper's bullish call on Chinese stocks has yielded significant returns, with Alibaba Group Holding Ltd. (NYSE:BABA) shares rallying 40.44% since his Sep. 26 declaration that he was buying "everything" in China.
What Happened: BABA shares closed Monday at $147.57, up 4.59%, representing a substantial gain from $105.07 when Tepper made his bold prediction. The hedge fund manager cited exceptionally low valuations and China's fiscal stimulus plans as key factors behind his investment thesis.
Regulatory filings show Appaloosa Management increased its stakes in major Chinese e-commerce names during the fourth quarter of 2024, with Alibaba remaining among the fund's largest holdings.
The firm also boosted positions in PDD Holdings Inc. (NASDAQ:PDD), JD.Com Inc. (NASDAQ:JD), and China-focused ETFs including iShares China Large-Cap ETF (NYSE:FXI) and KraneShares CSI China Internet ETF (NYSE:KWEB).
"When that came in, we got a little bit longer... more Chinese stocks," Tepper said in September on CNBC's "Squawk Box," revealing he had exceeded his usual 10-15% allocation limits for Chinese investments.
While BABA has outperformed, performance has varied across Tepper's China investments. JD.com has climbed 19% since September, but PDD Holdings declined 0.38% during the same period.
Why It Matters: China's economy beat forecasts with 5.4% growth in the fourth quarter of 2024, supported by Beijing's stimulus measures including interest rate cuts. Investors now await details on additional fiscal support targeting consumer demand and the troubled real estate market.
Concerns remain about deflation and the potential impact of President Donald Trump's 10% tariffs on Chinese imports. Beijing has responded with targeted retaliatory duties, vowing to protect its interests against what it calls "bullying."
Tepper isn't alone in his China optimism. Michael Burry's Scion Asset Management has also established significant positions in Chinese tech companies, with Alibaba representing 16.36% of the fund's total investments, according to recent 13F filings.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Today, after hitting the high near 24,000 in the early session and entering bearish positions, the index fell sharply by nearly over 600 points, immediately recouping yesterday's losses significantly.
Moreover, today it broke the new high again, reaching a maximum of 24,076, but by the end of the market, it fell back by about 70 points, producing a bearish candle. The current trend has not yet been broken, but from the previous low until now, it has risen close to 6,000 points. It is believed that those with positions can continue to hold until there is a clear trend reversal for profit-taking. Those without positions can wait for a pullback to get in. Actually, it is hoped for a quick pullback, as it allows for entry and also provides a healthy breath.
Currently, the outlook remains the same as before. It is believed that even if there is a pullback, it shouldn't be too deep. However, if Futures fail to stabilize and close below 22,350, there may still be room for decline. The chance of Futures falling below 21,400 in the short term should be low, so it is considered that if a significant pullback occurs, it presents a good opportunity to incrementally go long. Recently, there has been a consistent approach to not hold positions overnight, only focusing on immediate trades, as there is no high chasing and no casual short selling.
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