Investor Michael Burry, known for his role in "The Big Short," is now betting big with these budget-friendly stocks, risking all his assets.
In a move that has caught the attention of the financial world, renowned investor Michael Burry, known for his prescient bet against the housing market in 2008, is reportedly investing heavily in Chinese stocks. Burry's portfolio currently holds over 65% of his assets in Alibaba, JD.com, and Baidu, signalling a belief in their undervaluation and the potential for a broader China stock market recovery.
The current outlook for these stocks is cautiously optimistic, with signs of a potential turnaround in Chinese stocks, partly driven by notable investors like Burry and billionaire David Tepper increasing their China exposure. Chinese stocks have shown some improvement recently due to fiscal measures announced by the Chinese government and the easing of U.S.-China trade tensions.
**Alibaba (BABA)**
Alibaba's stock has experienced some volatility, dropping about 2.22% to $111.47 after announcing a substantial $7 billion subsidy plan to boost its instant commerce services in China. Despite investor concerns about short-term profitability risks due to heavy capital outlays, Alibaba's strong payment ecosystem through Alipay gives it strategic leverage to influence buyer behaviour and compete against rivals such as JD.com in a mature e-commerce market. The company's focus on enhancing fast delivery and real-time shopping experiences may support medium- to long-term growth, though near-term margin pressure remains a risk.
**JD.com (JD)**
JD.com has shown positive momentum, with its stock up about 2.48% during a recent broad rally in Chinese stocks. JD.com is recognised for its logistics capabilities, which are crucial to its competitive advantage in China’s e-commerce sector. Market optimism about easing U.S.-China trade tensions could further benefit JD.com, positioning it to capitalise on regional economic growth and a potential reopening of trade channels.
**Baidu (BIDU)**
Baidu stands out for its transformation from a traditional search engine into a leading AI technology company in China. Its AI offerings, including the ERNIE Bot serving over 230 million users and its autonomous driving platform Apollo, are expected to drive future growth. Baidu’s AI Cloud segment is growing rapidly at about 26% year-over-year revenue growth, offering a strong long-term growth driver that may offset weakness in its core advertising business. Analysts’ forecasts for Baidu’s stock price vary widely, from approximately $34 to nearly $98 per share, reflecting ongoing uncertainties in the broader Chinese market and macroeconomic risks.
The key to realising the potential of these stocks lies in monitoring trade negotiations and regional economic developments that could unlock growth for these firms. While near-term volatility and macroeconomic uncertainties remain, the combination of innovation, strategic initiatives, and potential easing of trade tensions underpin a cautiously positive outlook for Alibaba, JD.com, and Baidu.
Investors with a high risk tolerance and a long-term investment horizon should consider joining Burry & Co. in buying China stocks. However, it's important to note that the China stock turnaround, if it occurs, could take years and come with significant volatility.
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### Summary Table: Key Factors Affecting Alibaba, JD.com, and Baidu in 2025
| Company | Current Stock Sentiment | Growth Drivers | Risks/Concerns | |-----------|---------------------------------------|-------------------------------------------------|-------------------------------------| | Alibaba | Slightly bearish short-term | Large e-commerce ecosystem, AI, payment system | Profit margin pressure from subsidies, intense competition | | JD.com | Positive with recent gains | Strong logistics, e-commerce growth potential | Trade tensions, market competition | | Baidu | Mixed forecasts, long-term optimism | AI innovation, cloud growth, autonomous driving | Advertising weakness, macroeconomic risks |
These stocks, specifically Alibaba, JD.com, and Baidu, are under the watchful eye of investors due to their potential for recovery in the Chinese stock market. The current outlook for these companies is cautiously optimistic, with trade negotiations and regional economic developments being key factors that could unlock growth for them.
Investors with a high risk tolerance and a long-term investment horizon may consider investing in these Chinese stocks, following in the footsteps of renowned investors like Michael Burry. However, it's important to note that any possible China stock turnaround, if it occurs, could take several years and come with significant volatility.
