Catenaa, Thursday, February 13, 2025 – Global hedge funds have ramped up their buying of Chinese stocks this year, with a surge in purchases last week driven by excitement over artificial intelligence startup DeepSeek, Goldman Sachs said in a client note.
Goldman’s prime brokerage data showed Chinese equities—both onshore and offshore—were the most actively purchased market worldwide through February 7. The buying spree between February 3 and 7 was the strongest in more than four months.
DeepSeek’s emergence as a low-cost AI model is reshaping global investor sentiment, countering concerns that China is lagging in artificial intelligence, a Hong Kong-based institutional sales director said.
Investors also welcomed Beijing’s economic stimulus measures and the relatively mild tariff increase announced by former US President Donald Trump.
The MSCI China Index has risen for four straight weeks since mid-January, gaining more than 6% in February, outpacing other major markets.
Billionaire investor David Tepper’s hedge fund, Appaloosa LP, significantly raised its stakes in Alibaba Group and JD.com during the fourth quarter, filings showed.
Goldman Sachs reported that 95% of last week’s Chinese stock buying was in individual stocks, particularly in consumer discretionary, technology, industrials, and communication services.
Meanwhile, hedge funds sold off energy, utilities, and real estate holdings.
Hedge fund exposure to Chinese equities has now risen to 7.6% of Goldman’s prime brokerage book, up from 10th percentile levels in January to the 23rd percentile over the past five years.
