US hedge funds, including renowned names like Bridgewater, have been trimming their exposure to Chinese stocks in recent weeks after continued outperformance from major regional indices.
Still, Tekne Capital’s manager partner and portfolio manager Beeneet Kothari remains convinced there’s significant further upside in China.
In fact, the Chinese AI stocks are entering a multi-year growth phase – and are, therefore, notably more attractive then their US counterparts at writing, he told CNBC in a recent interview.
With initial public offering (IPO) activity increasing and domestic tech independence accelerating, Kothari believes China is the place to be for forward-looking investors.
Why Kothari prefers Chinese AI stocks over their US rivals?
Beeneet Kothari sees China-based artificial intelligence stocks as better-positioned for explosive returns primarily because the country’s AI sector is in its infancy only.
“US is in year three of the AI market. ChatGPT got launched in November 2022. In China, it’s day 150. DeepSeek was earlier this year only.”
In the CNBC interview, Kothari pointed to rapid consumer adoption of AI tools in China – where usage already exceeds that of the US.
According to OpenAI chief executive Sam Altman, China makes up a quarter of global ChatGPT usage. Therefore, Kothari expects a massive buildout in China’s AI infrastructure over the next three years, mirroring the U.S. trajectory from 2022 onward.
For investors, this early-stage momentum mean a rare opportunity to ride the wave from the ground up. Kothari added:
“US and China want to decouple. So, the answer isn’t to get bearish China. If China and US wants to decouple, the answer there is to get bullish the Chinese supply chain.”
Chinese AI stocks Kothari recommends owning in 2025
Kothari sees US-China decoupling and the aforementioned AI buildout as a particularly massive opportunity for Chinese semiconductor stocks.
Speaking with CNBC, he highlighted GDS Holdings as a top pick – calling it “the landlord of AI in China” due to its data centre footprint.
Additionally, the Tekne Capital portfolio manager also favours names like Naura AMEC – saying they’re materially undervalued relative to their Western peers like ASML and Lam Research.
Another standout within the Chinese AI stocks is Didi Global, offering higher ride volume than Uber but a valuation closer to Lyft.
With the nation’s IPO market reopening, Kothari sees DD as strategic play ahead of its anticipated relisting, alongside other giants like Ant Financial and ByteDance.
Recommendation: bet on China’s tech independence
While US-China tensions and tariff risks dominate headlines, Kothari views these as distractions. He believes China is on a path to full tech independence, especially in semiconductors and AI infrastructure.
Rather than retreating, he argues investors should lean into China’s supply chain. With valuations still lagging Western peers, the next five years could see a dramatic re-rating of Chinese tech stocks.
For those willing to look past geopolitical noise, Kothari says the opportunity is clear: China’s AI revolution is just getting started.
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