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As of March 6, 2025, "Big Short" investor Michael Burry has rotated his stake from Alibaba (BABA) to JD.com (JD), doubling down on the Chinese e-commerce rival. Burry publicly criticized Alibaba's valuation, saying it would need to "fall by half" to interest him again, and he took issue with the company's massive capital raise for AI infrastructure. Meanwhile, JD.com's improving bottom line and expansion bets—including a Hong Kong megaproject and a $1.4 billion robotics push—are drawing him in.
Why Burry Dumped Alibaba
Burry's Scion Asset Management trimmed its Alibaba position after the stock ran up, calling it "too expensive." He specifically flagged the company's $5 billion+ AI capex plan as a red flag, arguing that the spending comes at a time when the core e-commerce business faces margin pressure. Industry analysts note that Alibaba's cloud and AI investments may take years to pay off, while its domestic market share continues to erode to rivals like Pinduoduo and Douyin.
JD.com's Profit Turnaround
In contrast, JD.com has shown consistent earnings improvement. The company reported a 12% year-over-year increase in net income for its fiscal fourth quarter, driven by cost controls and higher-margin services revenue. JD's logistics network, which covers over 95% of China's counties, remains a key competitive advantage. The firm also expanded its same-day delivery coverage to 2,000 new districts, boosting customer retention.
New Growth Engines: Hong Kong and Robotics
JD.com recently won a pilot development area in Hong Kong's Northern Metropolis, a massive cross-border infrastructure project. The joint venture with six partners will focus on smart warehousing and cross-border logistics. Separately, the company plans to invest RMB 10 billion (about $1.4 billion) in robotics by 2028, targeting warehouse automation, delivery drones, and autonomous vehicles. These moves align with China's "New Quality Productive Forces" policy, which encourages high-tech industrial upgrades.
Valuation Check: JD vs. Alibaba
JD.com trades at a forward P/E of 12x, compared to Alibaba's 15x and Pinduoduo's 18x. The stock also offers a 2.5% dividend yield, while Alibaba does not pay a dividend. Burry's shift suggests he sees more upside in JD's cleaner balance sheet and lower valuation risk. However, momentum investors should be cautious: JD shares have rallied 25% year-to-date, and any macro headwinds—such as renewed US-China trade tensions—could weigh on sentiment.
Risks to Consider
JD.com's heavy reliance on the Chinese consumer remains a double-edged sword. Retail sales growth has slowed to 4.5% in early 2025, and the property sector drag continues to dampen household spending. Additionally, the robotics investment is a long-term play that may not boost earnings for several years. Competitors like ByteDance's Douyin are aggressively expanding into JD's core categories, including electronics and home appliances.
Bottom Line
Burry's move from Alibaba to
