Key Takeaways
- Michael Burry identifies Hong Kong as an attractive market for finding undervalued stocks
- The Hang Seng Index has declined approximately 5% year-to-date as AI-focused markets rally globally
- Major tech names show steep losses: Alibaba down 25%, Tencent down 26%, Baidu down 14%, NetEase down 11%
- Scion Asset Management has recently expanded its position in JD.com
- By comparison, South Korea’s market has surged 58% and semiconductor ETFs have climbed 76% in 2026
Michael Burry, the legendary investor who famously forecast the 2008 financial crisis, has identified a new investment thesis: Hong Kong’s battered technology sector.
In a recent post on X, Burry stated that “it is a particularly good time to look to Hong Kong for cheap stocks.” He suggested these equities “should do well as the shine comes off Korea, Japan & the Soxx.”
This perspective emerged shortly after Burry cautioned investors that “the end is nigh” for the artificial intelligence trading boom.
The Divergence Between Hong Kong and Global Markets
The Hang Seng Index has recorded a decline of roughly 4.9% since the beginning of the year. Tepid consumer demand and decelerating expansion in China’s online retail industry have pressured valuations.
This performance creates a striking divergence from international markets benefiting from artificial intelligence enthusiasm. South Korea’s primary stock index has climbed 58% year-to-date, propelled by strong performance from Samsung Electronics and SK Hynix.
Japan’s Nikkei 225 has posted gains of approximately 24% since January 2026. The iShares Semiconductor ETF has rocketed higher by roughly 76%.
Conversely, prominent Hong Kong-traded technology companies have experienced significant declines.
Alibaba’s stock price has decreased about 25% this year. Tencent shares have dropped 26%, Baidu has declined 14%, and NetEase has shed approximately 11%.
Scion Asset Management Adds to JD.com Holdings
Burry has backed his thesis with action. This month, Scion Asset Management expanded its holdings in JD.com, a major Chinese e-commerce platform with Hong Kong listings.
JD.com shares have similarly faced downward pressure alongside comparable companies in the sector.
Burry’s investment thesis centers on the valuation disconnect created between artificial intelligence market leaders and Hong Kong technology firms. As capital flooded into semiconductor and AI-related equities, numerous Chinese tech enterprises found themselves trading at depressed multiples.
His perspective finds support from other institutional voices. Morgan Stanley recently advised clients to build positions in Hong Kong equities, pointing to anticipated improvements in corporate profitability.
Additional significant constituents of the Hang Seng’s technology segment include Lenovo, which has similarly lagged behind global AI-beneficiary stocks throughout 2026.
Burry’s investment case rests on the premise that capital allocation will eventually shift from elevated AI market valuations toward more attractively priced, neglected opportunities.
Whether such sector rotation materializes remains uncertain, though the valuation disparity between Hong Kong tech companies and AI-linked equities is substantial and well-established.
As of July 17, 2026, the Hang Seng’s technology leaders remain significantly discounted relative to their international competitors.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
