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China's Fabulous Four tech giantsBaidu (NASDAQ:BIDU), Alibaba (NYSE:BABA), Tencent (TCEHY), and Xiaomi (XIACF)are surging, doubling their market cap to $1.6 trillion year-to-date, while the Magnificent Seven U.S. tech stocks have lost $3 trillion in value, according to a note from Bank of America strategist Michael Hartnett.
Tesla (NASDAQ:TSLA) has been the hardest hit, down more than 35% year-to-date, while Meta Platforms (NASDAQ:META) is the only gainer, up over 7%. Meanwhile, Alibaba has soared nearly 70%, leading China's rally. Despite this, U.S. equities continue to dominate in capital inflows, with $123 billion pouring in year-to-date, compared to $14.9 billion in outflows from Chinese stocks.
However, China's market is outpacing the U.S. on a technical basis, trading over 20% above its 200-day moving average, while the U.S. market is up over 2%. Hartnett views 2025 as the year of international, favoring China and European stocks over the U.S., citing geopolitical risks and policy shifts as potential catalysts.
This article first appeared on GuruFocus.