David Tepper Ups Bets on Chinese Stocks Despite Trimming Alibaba Holdings

Hedge fund titan David Tepper continues to exhibit strong confidence in Chinese assets in the second quarter of 2024. According to Appaloosa Management's filings, Tepper's firm increased stakes in JD.com (JD.US) and KE Holdings (BEKE.US), while Alibaba (BABA.US) remains the firm’s largest holding. This strategy highlights Tepper's consistent investment in Chinese companies, comprising 26% of the overall stock portfolio. In Q2, Tepper’s Appaloosa trimmed its Alibaba holdings by approximately 7%. Yet, Alibaba still constitutes a significant proportion of the portfolio, accounting for 12% of the $6.2 billion stock investments. Besides, the firm re-allocated its capital by adding shares in other Chinese entities like JD.com, KE Holdings, and two Chinese exchange-traded funds (ETFs). Correspondingly, holdings in PDD Holdings (PDD.US) and Baidu (BIDU.US) were reduced. This rebalancing underscores Tepper's cautious yet optimistic stance on Chinese assets. Simultaneously, Tepper has been decreasing exposure to major American tech stocks, reducing holdings in Amazon (AMZN.US), Microsoft (MSFT.US), and Meta Platforms (META.US). Notably, the stake in Nvidia (NVDA.US) fell by a sizeable 84% to $85 million, now representing 1.4% of the portfolio. Aligned with his first-quarter maneuvers, when Tepper significantly amplified his positions in Chinese stocks, particularly Alibaba, this recent rebalancing affirms his long-term optimistic outlook on the Chinese market. During market corrections, Tepper capitalized by augmenting his holdings in key Chinese firms, leveraging state-backed funds aimed at market stabilization. Famed for his prescient bets during the 2008 U.S. housing market crash, Michael Burry also retains a favorable view of Chinese investments. Burry increased stakes in Alibaba and Baidu over the last quarter, although he reduced holdings in JD.com. Chinese companies now occupy nearly half of his $52 million stock portfolio. In summary, Tepper’s strategic repositioning within the Chinese market, marked by increased positions in JD.com and KE Holdings, alongside a trimmed but substantial stake in Alibaba, signals enduring confidence in China's economic prospects. This approach reflects a broader sentiment among seasoned investors finding value and growth potential in Chinese equities despite a global climate of economic uncertainty. Tepper’s continued emphasis on Chinese assets aligns with broader trends observed among prominent hedge fund managers, highlighting the critical role these assets play in diversified investment strategies.