Billionaires are shifting focus to undervalued Chinese retail market over AI sector

From Nasdaq: 2024-08-08 05:20:00

Over the last 18 months, Wall Street has seen a surge in interest in artificial intelligence, with Nvidia’s shares surging more than 100% this year. Despite this, billionaires are cautious and turning to undervalued sectors like China’s struggling $6.5 trillion retail market. David Tepper and Howard Marks have been buying shares of Chinese retail stocks, with Tepper favoring Alibaba, whose stock offers significant upside potential with its low price-to-free cash flow ratio. JD.com, on the other hand, is also seeing activity from Marks and could benefit from its supply chain capabilities and AI technology, showing promising signs of growth after a year of weak sales.

Meanwhile, investors like Tepper have also been investing in the KraneShares CSI China Internet ETF, which provides diversification across China’s online retail and entertainment sectors. With holdings including Alibaba, Tencent, JD.com, and others, the ETF offers exposure to top Chinese companies. Although China’s economy is subject to regulatory changes, the potential for significant returns in the coming years remains high as leading retail companies show signs of improvement. The ETF’s expense ratio is reasonable at 0.70%, making it a safe way to profit from China’s retail rebound.



Read more at Nasdaq: Forget Nvidia: Billionaires Are Scooping Up Bargains in This $6.5 Trillion Market