DeepSeek Impact? Billionaire David Tepper Bets Big on China, Increases Stakes in Alibaba, JD.com, And PDD

U.S.-listed Chinese stocks Alibaba Group Holding BABA, Baidu, Inc BIDU, JD.com, Inc (NASDAQ: JD), PDD Holdings Inc (NASDAQ: PDD), NIO Inc (NYSE: NIO), Li Auto Inc LI, and XPeng Inc (NYSE: XPEV) gave up their gains Tuesday after the Trump administration decided to delay the suspension of duty-free entry for packages valued under $800.

The delay will remain in place until the Commerce Department can establish systems to process and collect tariff revenues efficiently, according to a new executive action announced last Friday.

Also Read: Chinese Stocks Slide As Trump Eyes More Tariffs And Tougher Trade Restrictions

This decision affects Chinese e-commerce platforms like Shein, Temu, and Aliexpress, as well as U.S. retailers such as Amazon.com Inc., eBay Inc., and Etsy Inc., which ship goods from China.

The de minimis provision was part of a broader announcement by Donald Trump regarding 10% tariffs on Chinese goods, a move that could significantly impact global trade dynamics.

On the flip side, Appaloosa Management’s David Tepper increased his exposure to China-related stocks and exchange-traded funds (ETFs) last quarter.

Tepper increased his stake in companies, including JD.com, Alibaba Group Holding, and PDD Holdings, in the fourth quarter of 2024 after expressing his conviction in the country in September.

His move followed a rally in Chinese stocks as the government unveiled its stimulus measures to boost the economic slowdown perpetrated by the property sector meltdown.

The intensifying geopolitical tensions between the U.S. and China also gained steam as the Western counterpart imposed artificial technology sanctions on the Asian counterpart, restricting its access to advanced semiconductor technology.

SCMP cited regulatory filings indicating that Appaloosa raised its exposure to JD.com by 43%, Alibaba by 18%, Baidu by 7%, KE Holdings by 18%, and PDD by 1%. Appaloosa also increased its stake in KraneShares Trust KraneShares CSI China Internet ETF KWEB by 21.5% and iShares China Large-Cap ETF FXI by 14%.

China-linked stocks and ETFs accounted for about 37% of Tepper’s portfolio at the end of December as per SCMP.

Meanwhile, DeepSeek’s emergence as a low-cost AI model triggered a U.S. tech selloff, with Nvidia Corp NVDA losing $600 billion in market value in a single day.

Last week, Deutsche Bank compared DeepSeek’s emergence to the Soviet Union’s launch of the world’s first artificial satellite in 1957, flagging the Chinese AI startup as a “Sputnik moment.”

Alex Stauffacher of Vontobel told the SCMP that he expects China’s strides in AI to lead to the market diversifying their portfolios beyond U.S.-centric stocks.

David Chao of Invesco told the SCMP how Chinese equities, especially technology companies, were priced at a discount to their American counterparts.

Meanwhile, Alibaba’s affordable Qwen AI models have gained traction, with its latest clients being Stanford, Berkeley, and SCMP reports. E-commerce juggernaut Alibaba is considered the tech barometer of China.

In January, AI researcher Steven Hoi Chu-hong joined Alibaba’s Intelligent Information Platform unit based in Singapore as vice president.

Hoi will lead research and development of multimodal foundation models, agent-related studies, and applied solutions for consumer-facing AI businesses, SCMP cited Jiemian.

Alibaba has split its AI operations into two divisions, focusing on consumer applications and fundamental AI models and tools for enterprises and developers.

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