Bridgewater Dumps China Stocks, Piles Into AI

Bridgewater Associates, the world’s largest hedge fund, liquidated all of its holdings in U.S.-listed Chinese companies in the second quarter, marking a decisive retreat from Chinese equities. The move comes as geopolitical tensions and shifting investor sentiment cloud the outlook for the world’s second-largest economy.

In Q2, Bridgewater sold all 5.66 million shares of Alibaba, 2.79 million shares of JD.com, and 2.08 million shares of Baidu.

This was a complete reversal from Q1, when the fund had aggressively added around 5.4 million shares of Alibaba and 1.88 million shares of Baidu, and initiated a position of 2.79 million shares in JD.com.

The fund also sold its entire positions in Nio (1.75 million shares), Pinduoduo (1.74 million shares), and KE Holdings (880,000 shares). In total, Bridgewater offloaded $1.4 billion worth of shares across 16 Chinese companies. This marks the first time in years that Bridgewater has no direct exposure to Chinese equities.

Former U.S. President Joe Biden established a screening mechanism for outbound U.S. investments in Chinese firms developing semiconductors, artificial intelligence, and other cutting-edge technologies. However, this generally excluded publicly traded securities and derivatives. With U.S.-China relations strained, investors have grown more cautious about increasing exposure to Chinese assets.

As of the end of Q2, Bridgewater’s top 10 holdings were SPDR S&P 500 ETF (SPY), iShares Core S&P 500 ETF (IVV), Nvidia, iShares Core MSCI Emerging Markets ETF (IEMG), Alphabet Class A, Microsoft, Meta, Salesforce, Booking Holdings Inc (BKNG), and GE Vernova Inc (GEV). Apart from SPY and IEMG, all other positions were increased.

Bridgewater Bets Big on AI, Boosts Nvidia Stake

In Q2, Bridgewater sharply increased its Nvidia holdings, making it the fund’s third-largest position.

The firm bought nearly 4.39 million more shares of Nvidia, bringing its total to 7.23 million shares—a jump of over 154% from Q1. As of the quarter’s end, Nvidia accounted for 4.61% of Bridgewater’s portfolio.

Bridgewater also significantly increased positions in Microsoft, Alphabet Class A, and Meta, underscoring its bullish view on the prospects of U.S. AI leaders.