Michael Burry Doubles Down on Alibaba and JD.com in Q1 2026
1h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
michael-burryalibaba
Fazen Markets Editorial Desk
Collective editorial team · methodology
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Michael Burry’s Scion Asset Management significantly increased its holdings in major Chinese technology firms during the first quarter of 2026. The firm’s latest 13F filing, released June 27, 2026, revealed a 50% boost to its position in Alibaba Group Holding Ltd. and a 25% increase in JD.com Inc. This aggressive accumulation by the famed investor comes as the Nasdaq Golden Dragon China Index trades more than 60% below its 2021 peak, highlighting a stark contrarian bet on a sector mired in pessimism. The move suggests a calculated assessment that the prolonged sell-off has created a compelling risk-reward asymmetry for patient capital.
The Chinese technology sector has faced a multi-year downturn driven by a regulatory crackdown that began in late 2020, persistent macroeconomic headwinds, and escalating US-China trade tensions. The Nasdaq Golden Dragon China Index, a key benchmark for US-listed Chinese companies, fell from a record high of over 20,600 points in February 2021 to approximately 7,900 points by the end of Q1 2026. This represents a decline of over 60%, erasing trillions of dollars in market value from giants like Alibaba and Tencent.
Current conditions show tentative signs of stabilization. China’s government has recently shifted its tone from stringent regulation to emphasizing economic support for the private sector and technology innovation. Official statements in early 2026 have emphasized “healthy development” over punitive measures, a notable change in rhetoric. Concurrently, valuations have compressed to historic lows, with many large-cap tech stocks trading at price-to-earnings ratios far below their global peers.
The immediate catalyst for Burry’s increased positioning appears to be the perceived exhaustion of the selling pressure coupled with excessively bearish sentiment. Investor positioning data indicated net outflows from China equity funds for ten consecutive months through February 2026. Burry’s strategy often involves identifying assets where market sentiment is at an extreme, making this accumulation a classic contrarian play.
Scion Asset Management’s 13F filing for the quarter ending March 31, 2026, provides concrete evidence of the firm’s conviction. The firm increased its Alibaba stake to 150,000 American Depositary Shares (ADS), up 50% from the 100,000 shares held at the end of Q4 2025. The position in JD.com grew to 125,000 ADS, a 25% increase from the previous 100,000 shares. Based on the March 31 closing prices of approximately $78 for Alibaba and $28 for JD.com, the total value of these two holdings exceeded $16 million.
These additions occurred as share prices remained depressed. Alibaba’s stock price is down over 70% from its 2020 high of nearly $320. JD.com trades more than 60% below its 2021 peak. This price action contrasts sharply with the performance of US tech peers; the Nasdaq 100 index gained 8% year-to-date through Q1 2026, while the Golden Dragon China Index was flat. The valuation gap is stark: Alibaba’s forward P/E ratio sits near 10x, compared to over 25x for the average S&P 500 tech constituent.
| Metric | Alibaba (BABA) | JD.com (JD) | Nasdaq Golden Dragon China Index (HXC) |
|---|---|---|---|
| Q1 2026 Price Change | -2% | +3% | +1% |
| Value Decline from Peak | -70% | -60% | -62% |
| Forward P/E Ratio | ~10x | ~12x | N/A |
Burry’s move has immediate implications for other beaten-down Chinese tech equities. It could signal to other value and contrarian investors that a bottom-forming process is underway. Stocks like Baidu (BIDU) and Pinduoduo (PDD), which have similarly experienced severe drawdowns, may see increased institutional interest. The e-commerce and cloud computing sectors within China stand to benefit most directly from a sentiment shift. A sustained re-rating of Alibaba and JD.com could add billions in market capitalization, with Alibaba alone having the potential for a 20-30% rally on a return to a 15x P/E multiple.
A significant counter-argument is that structural challenges remain. Geopolitical risks, including potential US restrictions on investment or trade, have not disappeared. China’s domestic economic recovery from its property crisis is still fragile, and consumer spending may not rebound as quickly as optimists hope. These factors could continue to suppress valuations regardless of attractive multiples.
Positioning data from futures and options markets indicates that short interest on major Chinese tech ADRs remains elevated, though it has declined slightly from January 2026 highs. Burry’s accumulation is a direct bet against this prevailing short positioning. The flow of capital appears to be shifting slowly, with some global hedge funds beginning to dip their toes back into the sector after a multi-year absence.
The next major catalyst for these holdings will be the Q2 2026 earnings reports from Alibaba and JD.com, expected in early August. Market participants will scrutinize revenue growth, particularly in cloud and international segments, for signs of a fundamental turnaround. Any commentary from management on the sustainability of the regulatory thaw will be critical.
From a technical perspective, key resistance levels to monitor are $90 for Alibaba and $35 for JD.com. A sustained break above these levels on high volume would confirm a significant technical breakout and likely attract momentum buyers. On the downside, the 2026 lows of $72 and $24, respectively, represent crucial support.
The political calendar also holds important events. The US presidential election in November 2026 could drastically alter the trade policy landscape. Any policy proposals regarding tariffs or investment bans directed at China will cause extreme volatility in these assets. Monitoring policy statements from both candidates is essential for gauging medium-term risk.
Beyond Alibaba and JD.com, Scion Asset Management’s Q1 2026 13F filing showed a maintained position in STOXX Europe 600 ETF and new small stakes in several regional US bank stocks. The filing did not disclose any other direct holdings in Chinese companies, making the concentrated bet on the two e-commerce leaders particularly notable. The absence of diversification within the China theme underscores a targeted conviction in the specific value proposition of these two bellwethers.
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