Investors are fleeing U.S. tech stocks and funneling money into Europe and China, where things are moving fast. There’s no denying that Europe’s market saw its largest weekly inflow in over two years. Meanwhile, China’s tech scene is bursting, with Xiaomi and Huawei stepping up to challenge the dominance of U.S. giants like Tesla. The numbers tell a tale of massive opportunity that the average investor is only starting to notice.
Let’s talk about the numbers. Xiaomi’s SU7, launched in April 2024, has already surpassed the Tesla Model 3 in China in sales. From April 2024 to January 2025, the SU7 sold 162,384 units, edging out the Model 3 at 152,748. The reason? It’s not just about the cars themselves—it’s about the shift in consumer taste. The SU7, unlike Tesla’s stripped-down approach, offers luxury features like real leather seats and a cutting-edge digital dashboard that many Chinese buyers prefer.
What’s even more staggering is Xiaomi’s speed. From producing smartphones to now rolling out cars in less than two years? That’s a rapid shift, and it’s just getting started. Xiaomi’s second model, the YU7, will compete with Tesla’s Model Y and is expected to drop in about four months. The Chinese tech giants are no longer just catching up—they’re leading the charge.
And then there’s the larger story: Chinese stocks remain undervalued compared to their U.S. counterparts, especially when you consider the CAPE (Shiller P/E) ratios. The gap is wide, and it’s a goldmine for investors who are willing to stomach some volatility. Chinese tech is still cheap, and short interest in China ETFs is at an all-time high—meaning a squeeze is coming. The fear in the market is creating an opportunity for those who can handle the ride.
As for Alibaba and Baidu, they’re the poster children of this opportunity. Alibaba’s cash flows and profitability are solid. The market’s fear? That’s your chance to buy. At the moment, $BABA has run up about 50% without pulling back, but there’s room for a healthy correction. If we get a dip to the 200-week moving average around $106, don’t be surprised if that’s where the real buying happens. This is where you want to add to your position, not wait for the next “perfect” moment.
Europe is growing. China is booming. The U.S. is still riding high—but investors are starting to wise up. The shift is happening now. If you’re paying attention, you’re already ahead of the pack.
Sources:
https://x.com/Barchart/status/1891522209505484870
https://x.com/RealJimChanos/status/1891493655426298149
https://x.com/EquityBrian/status/1891263079691751602
https://x.com/ValueSeeker_/status/1891354420580880576