Analysis: Tencent and Alibaba, whose stocks have dropped 60% and 65% respectively since February 2021, have lost more market value than any other stock globally
Context & Ripple Effects
This is the endpoint of a three-act repricing. Tencent's first wobble came in 2018, when a 25% slide erased $143B on growth doubts alone; then Beijing's [[a:1159394|crackdown wiped a combined $823B off Tencent, Alibaba, and Kuaishou at the February 2021 peak]]. What the new analysis adds is scale: at down 60% and 65% respectively since February 2021, the two firms have destroyed more shareholder value than any other listed company on earth.
The follow-on coverage confirms it wasn't a dip: weeks later Tencent had fallen 64% from January 2021 and ceded its spot as China's most valuable company, shedding $623B on its own. For global funds, the question shifts from timing the bottom to whether either firm has an engine left that can rebuild valuation.
First-order effects
- Global investors in Tencent and Alibaba are sitting through the two largest absolute market-value losses of any stocks worldwide — a 60–65% drawdown that resets both firms' currency for acquisitions, stock-based compensation, and index weight.
- Alibaba's own reporting shows why the multiple compressed: quarterly net income down over 75% despite revenue up 9%, squeezed by heavy AI spending and weak Chinese retail consumption.
Second-order effects
- Portfolio managers benchmarked against global indices are forced to cut China-tech exposure mechanically as the weights shrink, deepening the selling beyond what fundamentals alone would justify.
- Alibaba's response is to spend into the trough — open-sourcing Qwen models under Apache 2.0 and passing 3 billion downloads in six months — trading near-term margin for relevance in the AI stack, while its shares recover more than 40% from June lows.
Third-order effects
- If the pattern holds, Chinese platform giants stop being valued as consumer-growth compounds and get re-rated as regulated infrastructure whose upside depends on an AI pivot — a shift the later coverage keeps testing, with the Hang Seng Tech Index still shedding nearly $600B as recently as the October 2025 peak's aftermath.
- The precedent makes regulatory risk a permanent discount line in every valuation model for Chinese listings, not a one-off event premium.
The trend: China's platform giants are being structurally re-priced from consumer-growth stories into regulated, AI-capex-heavy utilities, with Beijing's policy cycle — not earnings — setting the valuation floor.