-- Alibaba Group's (HK:) (NYSE:) Hong Kong shares rallied to a seven-month high on Friday after Michael Burry’s investment firm hiked its stake in the e-commerce giant and several of its Chinese peers. 

surged over 7% to HK$85.80- its highest level since October 2023. The stock was the best performer on the index, which rose 0.9%. 

Burry’s Scion Asset Management increased its stakes in Alibaba and peer JD.com (HK:) (NASDAQ:), with the latter becoming its biggest holding in the first quarter, a 13-F filing showed earlier this week. Scion increased its stake in JD by 80%. 

Alibaba was the fund’s second-biggest holding, with Scion increasing its position in the ecommerce giant by 50,000 shares to 125,000 shares, worth around $9 million. 

Burry, who famously predicted and shorted the 2008 U.S. housing crisis, has been buying into heavily-discounted Chinese technology stocks over the past year, on bets that the sector will rebound tracking a broader post-COVID recovery in the Chinese economy.

While Chinese stocks fizzled in 2023, Burry’s bet now appears to be bearing fruit so far in 2024. Alibaba is trading up 14% so far in 2024, while JD.com is up 21%. 

The gains came even as Alibaba disappointed with its first-quarter earnings. JD, however, beat expectations with its first quarter earnings on Thursday. 

Still, the broader Chinese stock market marked a strong rebound over the past two months, as global investors slowly warmed up to local stocks amid persistent government support.

China was also seen winding down a regulatory crusade against its internet giants over the past year, as Beijing looked to all avenues to boost growth.