Global hedge funds have intensified their buying of Chinese stocks, reaching the highest net purchases in over four months last week, according to Goldman Sachs. This surge in investment was driven almost entirely by long positions, with Chinese onshore and offshore stocks becoming the most net bought market for hedge funds in 2025. The increased interest in Chinese equities comes despite a volatile period for the market, which saw a rally fueled by stimulus measures from the Chinese government in late September, followed by a decline due to concerns over the scale of fiscal stimulus, a weak economic outlook, and a property crisis. Notably, the focus on Chinese stocks has been influenced by the success of DeepSeek's AI model, which has reignited interest in the country's shares. Hedge funds have particularly increased their stakes in companies like JD.com by 43% and Alibaba by 18%, with the latter being a significant holding for investors like David Tepper, who boosted his China-related investments before the latest rally.