Key Takeaways
- Legendary investor Michael Burry identifies Hong Kong as prime territory for finding undervalued stocks
- Hong Kong’s benchmark Hang Seng Index has declined roughly 5% year-to-date as AI-focused markets rallied
- Major Chinese tech names show significant losses: Alibaba down 25%, Tencent off 26%, Baidu declining 14%, NetEase falling 11%
- Burry’s Scion Asset Management has boosted its position in JD.com recently
- Meanwhile, South Korea’s market has surged 58% and semiconductor ETFs have climbed 76% in 2026
The investor who famously forecasted the 2008 financial crisis, Michael Burry, has identified a fresh opportunity in Hong Kong’s battered technology sector.
In a post shared on X earlier this week, 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.”
These remarks followed closely on the heels of his warning that “the end is nigh” for the artificial intelligence trading frenzy.
The Divergence Between Hong Kong and Global Markets
Hong Kong’s Hang Seng Index has registered a decline of approximately 4.9% since January. Sluggish consumer demand and decelerating momentum in China’s online retail landscape have dragged down market performance.
This downturn creates a striking contrast with international exchanges benefiting from the AI boom. South Korea’s main stock index has rocketed 58% higher this year, propelled by strong performance from Samsung Electronics and SK Hynix.
Japan’s Nikkei 225 has posted gains of approximately 24% since 2026 began. The iShares Semiconductor ETF has exploded roughly 76% higher.
Conversely, prominent Hong Kong-traded technology companies have experienced substantial selloffs.
Alibaba stock has tumbled about 25% this year. Tencent shares have dropped 26%, Baidu is down 14%, and NetEase has shed approximately 11%.
Scion Asset Management Increases JD.com Holdings
Burry has moved beyond commentary to action. This month, Scion Asset Management expanded its stake in JD.com, the Chinese e-commerce giant with Hong Kong listings.
JD.com stock has similarly faced headwinds throughout the year, mirroring the broader weakness in its sector.
Burry’s investment thesis centers on the widening valuation disparity between AI market darlings and Hong Kong technology names. As investors piled into semiconductor and AI-related equities, numerous Chinese tech firms were abandoned and now trade at depressed valuations.
His perspective finds support from other market watchers. Morgan Stanley has recently advised clients to build positions in Hong Kong equities, pointing to anticipated improvements in corporate profit growth.
Other significant constituents of the Hang Seng’s technology sector, such as Lenovo, have similarly lagged behind their AI-focused global competitors throughout 2026.
Burry’s investment case rests on the assumption that capital flows will ultimately shift away from elevated AI valuations toward cheaper, neglected opportunities.
Whether this anticipated rotation materializes is uncertain, but the valuation disconnect between Hong Kong tech and AI-driven markets is substantial and clearly evident in current pricing.
As of July 17, 2026, Hong Kong’s technology leaders remain significantly undervalued relative to their international peers.
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