Chinese stocks have become a “buy everything” opportunity after the government unleashed a substantial fiscal stimulus, according to billionaire investor David Tepper. Speaking on CNBC, Tepper outlined his bullish view on China’s market, which has been largely stagnant, trading at the same level as it did in 2007.
Tepper, who runs the $6 billion hedge fund Appaloosa Management, said that China’s aggressive actions exceeded expectations. The country's recent stimulus measures followed the U.S. Federal Reserve’s 50-basis-point rate cut, a move Tepper predicted would prompt China to ease its monetary policy. However, the scale of China’s response, including rate cuts, liquidity support for its stock market, and bank reserve requirement reductions, went beyond what he had anticipated.
"What we’re seeing now is a major push by China’s central bank, and that creates significant opportunities," Tepper said. "The People's Bank of China governor Pan Gongsheng promised more stimulus measures, which is unusual language, especially from China’s leadership."
China’s stimulus actions have not only supported the stock market but also included measures to encourage stock buybacks, Tepper emphasized. "They’re not just encouraging buybacks; they’re lending companies the money to do it. This is a very aggressive move to support equities," he noted.
The response in the markets has been significant. Major Chinese tech stocks such as Alibaba, Tencent, and PDD Holdings surged over 7% following the stimulus announcements. Broader indices, like the iShares MSCI China ETF, rose 8% in a single day and were up more than 16% for the week. Despite these gains, Tepper believes there’s still room for growth. "Even with these moves, the stocks are trading at low multiples, and you’ve got double-digit growth rates," he explained.
For wealth advisors and RIAs managing client portfolios, Tepper’s remarks signal a potentially compelling entry point for Chinese equities, especially given the low valuations and strong government backing. The combination of internal fiscal stimulus, favorable monetary policy, and undervalued stock prices could create a lucrative environment for investors looking to diversify internationally.
Tepper’s confidence in Chinese equities extends beyond the recent rally. His hedge fund has been building a significant position in Chinese companies. As of June 30, Alibaba made up 12% of his portfolio, and he hinted that he’s continuing to buy. "I used to say I wouldn’t go above 10% or 15% in any position, but that’s not true anymore," he admitted. Tepper also holds shares in Baidu, PDD Holdings, JD.com, and the KraneShares China Internet ETF, signaling a broad-based bet on China’s tech and internet sectors.
Tepper downplayed concerns that potential geopolitical tensions, such as the re-election of Donald Trump and the imposition of steep tariffs on Chinese goods, could derail his bullish outlook. "I don’t think tariffs will matter that much, not with the kind of internal stimulus we’re seeing," he stated. This perspective offers reassurance to advisors worried about the impact of global trade conflicts on Chinese stocks.
While Tepper is all-in on China, his approach to U.S. markets is more selective. He acknowledged that U.S. equities are less attractive from a value standpoint, but he isn’t turning bearish. "I don’t love the U.S. market in terms of value, but I’m definitely not shorting it," he said. Tepper pointed to a "good economy," ongoing monetary easing, and the potential knock-on effects of China’s stimulus as reasons to stay long on certain U.S. stocks.
For U.S. opportunities, Tepper highlighted sectors with exposure to China, such as casino operators Wynn Resorts and Las Vegas Sands. He also mentioned companies benefiting from the growing power demands of AI technology as potential investment options. "You have to be somewhat long in the U.S. markets, even if you’re cautious, because the global environment is so favorable," Tepper advised.
Tepper’s decision not to hedge his bullish China positions reflects his confidence. "My counter bet is that I don’t care," he said, indicating that the risk-reward balance is squarely in favor of Chinese equities right now.
For RIAs, Tepper’s insights suggest that the next big move in global markets could come from China. The combination of significant fiscal stimulus, undervalued stocks, and government support for buybacks presents a rare opportunity for clients seeking international exposure. As U.S. markets become increasingly expensive, a well-timed shift into Chinese equities could enhance portfolio diversification and growth potential.
Moreover, Tepper’s selective approach to U.S. stocks underscores the importance of focusing on sectors with clear growth drivers. Advisors should consider companies with exposure to Chinese growth, like those in the casino industry, or those benefiting from AI technology, while being cautious about broad market valuations.
Ultimately, Tepper’s strategy provides a clear message for advisors: China is back in play, and it’s time to pay attention. The aggressive stimulus measures, combined with low valuations, make it a compelling market for those willing to take on the risk. As always, careful portfolio construction and client-specific risk management remain key, but the opportunities in China are hard to ignore.
