TLDR
- Michael Burry identifies Hong Kong as an opportune market for finding undervalued stocks
- Hong Kong’s Hang Seng Index has declined roughly 5% in 2026 as AI-focused markets rallied
- Major tech names show steep declines: Alibaba down 25%, Tencent down 26%, Baidu down 14%, NetEase down 11%
- Scion Asset Management, Burry’s investment firm, recently expanded its position in JD.com
- By comparison, South Korea’s market has surged 58% and semiconductor ETFs have climbed 76% this year
Michael Burry, the legendary investor who famously forecast the 2008 financial crisis, has identified a new investment opportunity in Hong Kong’s struggling tech sector.
In a post 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.”
This commentary followed closely on the heels of his recent warning that “the end is nigh” for the artificial intelligence investment boom.
Understanding Hong Kong’s Market Underperformance
The Hang Seng Index has experienced a decline of approximately 4.9% year-to-date. Sluggish consumer demand combined with deceleration in China’s online retail industry has pressured the broader market.
This performance diverges dramatically from international markets benefiting from the artificial intelligence revolution. South Korea’s primary stock index has climbed 58% in 2026, propelled by strong performances from Samsung Electronics and SK Hynix.
Japan’s Nikkei 225 has posted gains of approximately 24% since January 2026. The iShares Semiconductor ETF has experienced a remarkable rally of roughly 76%.
In stark contrast, prominent Hong Kong-traded technology companies have moved sharply lower.
Alibaba’s stock price has tumbled about 25% since the beginning of the year. Tencent shares have declined 26%, Baidu is down 14%, and NetEase has retreated approximately 11%.
Scion Asset Management Increases JD.com Holdings
Burry has moved beyond commentary to action. His investment vehicle, Scion Asset Management, boosted its stake in JD.com earlier this month—a major Chinese e-commerce platform with Hong Kong listings.
JD.com shares have similarly struggled throughout 2026, tracking the weakness seen across comparable companies.
Burry’s thesis centers on the significant valuation disparity created between AI market winners and Hong Kong’s technology sector. As market participants piled into semiconductor and AI-related equities, numerous Chinese tech firms were abandoned and now trade at depressed valuations.
This perspective isn’t unique to Burry. Morgan Stanley recently advised clients to accumulate Hong Kong stocks, pointing to anticipated improvements in corporate profitability.
Additional major players within the Hang Seng’s technology component include Lenovo, which has similarly lagged behind global AI-focused competitors throughout the year.
Burry’s investment case rests on the expectation that investor capital will eventually shift from richly valued AI stocks toward cheaper, neglected opportunities.
Whether this anticipated rotation materializes is uncertain, but the valuation disconnect between Hong Kong’s tech sector and AI-centric markets is substantial and extensively documented.
As of July 17, 2026, Hong Kong’s leading technology companies remain significantly discounted relative to their international peers.
