Stock Market

Smart Money in AI: US Tech(QQQ) vs Chinese Tech (CQQQ) valuation gap

James B. June 24, 2025

Over the past few months, I’ve been exploring ways to gain exposure to Chinese tech companies in my portfolio. The main draw? Attractive valuations and the rapid strides these firms are making in AI and quantum computing. While U.S. tech stocks have soared, many Chinese tech giants are still trading well below their previous highs—offering what some investors see as a compelling entry point.

What’s more, recent developments have reignited optimism. China’s regulatory crackdown on tech appears to be easing, with President Xi Jinping meeting tech leaders and signaling support for innovation. Companies like Alibaba have surged over 50% this year, partly due to AI partnerships with global players like Apple. Meanwhile, Chinese AI firms such as DeepSeek are making headlines for developing powerful models at a fraction of the cost of their U.S. counterparts

So I dug into some ETF options—and here’s what I found:

For U.S. Tech Exposure

Invesco QQQ Trust (QQQ) Tracks the Nasdaq-100, with heavy exposure to U.S. tech giants like Apple, Microsoft, Nvidia, and Amazon.
Technology Select Sector SPDR Fund (XLK) Focuses on large-cap U.S. tech companies—ideal for pure-play tech exposure.

For Chinese Tech Exposure

Invesco China Technology ETF (CQQQ) Covers a broad range of Chinese tech firms—from software and cloud to hardware and AI. Top holdings include Tencent, Meituan, and Baidu
KraneShares CSI China Internet ETF (KWEB) Invests in Chinese internet and e-commerce leaders like Alibaba, Tencent, and JD.com. . It’s also gaining traction with institutional investors and recently saw a drop in short interest, signaling renewed confidence.
iShares MSCI China Multisector Tech ETF (TCHI) Offers diversified exposure across Chinese tech sectors, including e-commerce, streaming, automation, and semiconductors.

So I decided to build my own “U.S.–China Tech” portfolio with below split

40% QQQ (U.S. tech)
60% CQQQ (China tech)

This gives me a concentrated bet on the two largest and most dynamic tech ecosystems in the world—balancing innovation leadership with valuation opportunity