China — AI boom & re-rating (new) Bullish ▲

Hay (Jul 17, Friday POW!): reiterates the Haymaker buy of the iShares China Large-Cap ETF (FXI) at ~$34 (vs a $38.42 Feb-2026 entry), arguing the ~11.5% drawdown is macro/sentiment — US tariffs to ~17% effective, a deliberate Hormuz-era Beijing slowdown to cut oil imports, and a weak "K-shaped" consumer (May retail −0.6%, first contraction since Dec-2022) — not fundamental. The four original bull pillars hold (the Dec-2025 pivot to "moderately loose" policy — first since 2010, the DeepSeek moment, post-Xi/Jack-Ma regulatory normalization, 10–11× earnings) while AI monetization accelerates: China's daily AI-token usage is up ~1,400× in 26 months (100B → 140T by Mar-2026, the fastest deployment ramp of any major economy), Alibaba Cloud at $1.3B/qtr on triple-digit growth, Tencent net profit +21% y/y via AI integration, Baidu AI now 52% of revenue; Beijing adds a 50% data-center energy subsidy and Citi flags Q2-2026 as the cyclical low before H2 fiscal acceleration. At 10.78× trailing earnings — "the cheapest major stock market in the world" (no trillion-dollar market cap while Korea has two, Taiwan one, the US ten) — with light positioning (~$895M of 12-month outflows) and a controlled correction after a four-year-base breakout, the setup echoes oil/energy at end-June just before its snappy rally. Reiterated Buy at $34, 12–18-month target $42–48 (a 12–13× re-rate), eventually >$60; size for the binary VIE/tariff risk (hold only what's comfortable through a 25% drawdown). "Zero concerns China's stock market is caught up in a bubble." Gromen (MacroVoices #542, Jul 23): the "cheaper AND better" moment is arriving in AI — the Rust-Belt sequence he's watched for 25 years (cheaper-but-worse → about-as-good → cheaper and better) just reached frontier models (the Kimi performance shock weighing on US AI names; Z.AI's ~1GW data center reportedly running entirely on Chinese semiconductors, no NVIDIA), and "the tech guys and the finance guys really have no idea what's coming for them" — US tech hasn't faced real competition since late-80s Japan. Near-term a US-AI wobble drags semis down with it (he'd add the dip); within ~5 years the China moment forces a rethink of what multiple semis deserve. Weaponizing semiconductors against China (2022) is exactly what guaranteed the hedge got built. Eisman (Jul 24): Moonshot's Kimi K3 claims parity with any LLM "but for a fraction of the cost" — stacked on capital-intensity and no-moat worries, "now, the possibility of a price war looms closer." Singh (Aug 9): Chinese AI-biology platforms have compressed hit-to-lead times so far that lab-monkey prices hit $26,000 each; China now produces ~34% of global clinical-stage drugs and 40% of new candidates, and Western pharma is licensing pre-vetted AI-designed molecules rather than spending "$1B+ developing drugs in-house over a decade" — BMY/Jiangsu Hengrui (up to $15.2B, $650M upfront), Pfizer/3S Bio ($1.25B upfront, up to $6B), Regeneron/Hansoh ($80M upfront, $2B potential), plus AbbVie and Merck on ADCs. 30-45% of US pharma licensing deals now involve Chinese assets, with rising bipartisan national-security concern. China is also "overdue for a stimulus announcement," with JD.com's print the read on the consumer. AUG-16 (Jay Singh, SSR): position maintained on a policy catalyst — "we think the Chinese tech stocks are undervalued and there will be a stimulus announced later this year," held via Baidu and Alibaba into their prints. On the hardware side the concentration is now extreme: Chinese makers accounted for more than 97% of global humanoid-robot shipments in 1H26, volumes more than tripling to 19,000 units with Agibot at 44% share, and Unitree is IPO-ing in Shanghai at $9B with retail demand oversubscribed ~8,000% — "which sounds quite insane." 2026-AUG-15 — App Economy Insights PRO: the two halves of China in one issue. Up: Tencent revenue +11% and accelerating, Marketing Services +22% on AI ad targeting, domestic gaming +17%, a native WeChat AI agent in testing and WorkBuddy as China's most widely used office agent — bought with capex +176% and negative free cash flow. Down: JD.com posted its first quarterly revenue decline since going public (−3% to $51.1B) against tough government-appliance-subsidy comparisons and "softer Chinese consumption," fixing profitability by shrinking — retail margin a peak-season record 4.6%, gross margin up a 17th straight quarter, food-delivery losses more than halved. AI capability is re-rating while the consumer is not. 2026-AUG-24: Hay: Qwen has become the global open-source default — “3 billion downloads… more than 50% of all open-source model downloads worldwide,” beating Llama “13 to 1,” 300,000 derivative models — and the commercial link is explicit: “developers building on Qwen deploy on Alibaba Cloud,” cloud revenue +45%, its fastest in 22 quarters. A $10.2bn raise, 100% earmarked for AI infrastructure, closed nearly three times oversubscribed. (David Hay, Haymaker Portfolio Update 2026-AUG-24) 2026-SEP-21 (CNBC ETF Edge, KraneShares' Brendan Ahern): heavy KWEB call open interest on hopes for a better-than-expected Xi–Trump summit. MSCI China is 80% Hong Kong ('a rough year'), while mainland semiconductors in KraneShares' China semi fund are +31% YTD; the AI plays are Alibaba, Tencent, Baidu, Z.ai, MiniMax and Lenovo.