Now, four tumultuous months in, how have we fared?
Since the portfolio’s inception in May this year, the AI portfolio is up 8.7%. On an annualised basis, this works out to 24.1%.
As a quick refresher, two key themes guided our initial portfolio selection: enterprise software (or SaaS [software as a service]) companies and China exposure.
Exposure to China
Thus far, China bulls will be heartened to know that the China trade has delivered the strongest returns. Alibaba Group Holding, Horizon Robotics and RoboSense Technology Co are up 38.0%, 43.6% and 9.8% respectively — despite ongoing headwinds from intensifying involution within multiple domestic sectors that sent a wide cross-section of Chinese equities on a volatile ride in the past few months.
Indeed, Alibaba and RoboSense were underwater for much of the portfolio’s life until August — when record levels of capital inflows saw the Chinese market stage its biggest rebound since the DeepSeek-fuelled rally earlier this year.
See also: Transparency demands courage, clarity requires discipline — both are needed to build trust
As we have covered at length in the past, China is currently mounting credible competition to the US on the tech front, especially in applied and industrial applications.
Complementing this, market momentum in both the Hong Kong and mainland bourses have, in recent months, been buoyed by investors rotating out of the US market amid Trump-era turbulence, mounting sovereign debt risks and a weakening greenback.
In addition, their relative valuations were compelling, given the rally in US stocks that has sent valuations above historical averages. The US dollar ended the first half of the year with its steepest decline since 1973, and some analysts are projecting further depreciation through 2026. Currency movements can make a big difference in terms of total returns for investors.
This surge of global interest in Chinese equities is further reinforced by Beijing’s ongoing reforms, aimed at restoring investor confidence since the 2015 shock devaluation of the yuan triggered a mass exodus of foreign funds.
In June this year, People’s Bank of China (PBOC) governor Pan Gongsheng outlined a vision of the yuan playing a central role in global capital flows, anchored by looser capital controls and policies to facilitate cross-border investments.
Taken together, these factors have whetted investor appetite for Chinese assets — so much so that, in September 2025, cross-border capital flows surpassed China’s trade flows for the very first time.
For more stories about where money flows, click here for Capital Section
Alibaba
Alibaba, for one, has been a major beneficiary of this trend change. Earlier this month, the company tapped capital markets with a US$3.2 billion ($4.12 billion) convertible note issuance to fund its data centre buildout and international e-commerce expansion.
This is part of the company’s US$53 billion pledge of investments in AI infrastructure over the next three years (announced in February 2025) as Alibaba seeks to defend its dominance in China’s fiercely competitive domestic market.
Alibaba features in both our AI and Absolute Returns Portfolio, underscoring our conviction in its long-term value.
When we added the company to the Absolute Returns Portfolio in June, we highlighted Alibaba’s strong balance sheet — US$50.5 billion in net cash holdings — and market-leading position in China’s retail e-commerce and infrastructure cloud services sectors.
These advantages have proven critical in navigating the ongoing three-way price-war with JD.com and Meituan in the domestic food delivery business. In September, Alibaba reportedly committed an additional RMB1 billion (US$140 million) in customer incentives, bringing its total pledged subsidies to RMB50 billion.
While Alibaba’s food delivery arm Ele.me — merged into the group’s core e-commerce platform in June — remains under pressure, the company’s technology leadership continues to strengthen.
In the June quarter, revenue and earnings narrowly missed expectations on the back of the ongoing price war, but the cloud division outperformed with 26% y-o-y growth, a significant acceleration from 18% in the prior quarter.
A major contributor to this outperformance was AI-related revenue, which registered an eighth consecutive quarter of triple-digit gains, driven by products such as the company’s flagship Qwen3 model family and Wan 2.2, a one-click cinematic video generation tool.
RoboSense and Horizon Robotics
Meanwhile, RoboSense and Horizon Robotics found themselves in the crosshairs of the electric vehicle (EV) industry’s price war in 1H2025. Escalating competition saw Chinese automakers driven into aggressive discounting practices — the ferocity of which even forced market leader BYD to lower its annual sales target for 2025 after quarterly profit plunged nearly 30% y-o-y.
Against this backdrop, RoboSense and Horizon Robotics saw their share prices battered because of their significant exposure to the EV sector through their smart-driving-related businesses (RoboSense, as a top LiDAR [light detection and ranging] supplier; and Horizon Robotics, the leading advanced driver-assistance systems [ADAS] and autonomous driving [AD] solutions provider).
In July 2025, Beijing’s official anti-involution campaign helped stabilise market sentiment and partly arrested the downward pressure on their valuations. While near-term EV headwinds remain, both companies’ primary growth catalysts lie in non-automotive applications — particularly in robotics and industrial automation, which have so far delivered strong results.
In 2Q2025, RoboSense recorded 24.4% y-o-y revenue growth, with robotics segment sales up 632%. Product shipments totalled 34,400 units, primarily serving industrial warehousing and autonomous delivery end-markets. The company is also working with more than 20 humanoid robot makers worldwide, including Unitree Robotics, Dobot and X-Humanoid.
As for Horizon Robotics, the company reported 68% y-o-y growth in 1H2025. Shipments of its flagship Journey series of automotive chips topped 10 million units in August, setting a new benchmark for Chinese automotive chipmakers.
The company maintains a dominant position with a 45.8% share of the ADAS market and 32.4% across assisted driving solutions among Chinese original equipment manufacturers (OEMs). In September, Horizon Robotics struck a deal with Alibaba-backed Hello Inc to co-develop a full-stack Level 4 AD system for the latter’s future robotaxi operations.
In addition, Horizon Robotics has diversified into the robotics market through wholly-owned subsidiary, DiGua Robotics. DiGua develops intelligent robotics development kits (RDKs), such as the RDK S100, designed for embodied and industrial robot applications.
Cadence Design
While technically an SaaS company, Cadence Design Systems warrants its own category. Its electronic design automation (EDA) software is indispensable to the AI buildout, enabling chipmakers to design, test and validate chips before manufacturing.
The company’s stocks stumbled briefly at the end of May when the US Department of Commerce placed export restrictions on EDA companies, blocking sales to China.
The suspension was later rescinded in July and, at a Goldman Sachs conference in early September, CEO Anirudh Devgan assured investors that China sales were “back to normal” for 3Q2025. As at 2Q2025, Cadence Design’s exposure to China hovered at just under 10% of total revenue.
Notably, despite the temporary export restrictions and a one-time US$140.6 million settlement with the US Department of Justice, Cadence Design registered top- and bottom-line 2Q2025 beats. Management has since raised full-year revenue guidance to reflect expected growth of 13% in revenue and 16% in earnings per share.
SaaS
At the AI Portfolio’s inception, we classified enterprise software names into “risk-on” and “risk-off” buckets based on their respective revenue models, considering factors such as exposure to small and medium-sized businesses and whether revenue was derived from seat-based subscriptions or usage-based models — the latter, we perceived to offer less earnings visibility. In practice, performance has been shaped less by the distinctions we established than by the broader “enterprise software” umbrella.
In this category, Datadog has been a standout. The stock surged, following its inclusion in the Standard & Poor’s 500 index in July. Over the trailing 12 months, the company generated US$3 billion in revenue, up 26% y-o-y.
Datadog continues to broaden its portfolio of observability and monitoring products, including the release of its Internal Developer Portal (IDP), a centralised catalogue of ready-made tools that streamline software development, monitoring and security.
Elsewhere, our other enterprise software stock picks have delivered more muted performances, with markets appearing increasingly impatient with the slow pace of workflow transformation from enterprise AI adoption. But, as we have emphasised from the outset, the AI Portfolio is a long-term bet.
While the markets currently favour mega-caps and infrastructure players, we continue to believe that embedding AI into the software layer will deliver meaningful value to customers, which in turn should drive adoption and growth for enterprise software companies over the longer term — hence our positioning today, even if early.
Workday: Exit
Having said that, we have decided to exit Workday. The company delivered earnings beats for the two quarters we have held it. On both occasions, however, the stock was punished for weaker-than-expected forward guidance relative to the market’s elevated expectations.
For context, the company has historically traded at a premium to ERP (enterprise resource planning) peers.
In recent years, Workday has made a concerted push into the education and government sectors — key areas that the management has identified as primary growth drivers for the company. These are precisely the sectors, however, that are facing funding cuts under the Trump Administration.
Separately, concerns persist around the sustainability of Workday’s seat-based revenue model, as AI-driven automation could reduce the need for individual user licences. Given these dynamics, we have chosen to reallocate capital to Amazon.
Amazon: Entry
Amazon.com is a leader in both e-commerce and cloud services. Its cloud computing segment, Amazon Web Services (AWS), serves as the company’s primary profit engine, consistently accounting for more than half of operating profits (53% in 2Q2025, see Chart 1).
As at 2025, Amazon AWS held roughly 30% of the global cloud infrastructure market, well ahead of Microsoft Azure (20%) and Google Cloud (13%).
In recent quarters, the segment has been weighed down by slower-than-expected growth, with 1H2025 marking the segment’s weakest growth period on record. This is attributed, however, to supply-side constraints, not softer demand.
So far this year, Amazon’s AWS platform has continued to win marquee customers such as PepsiCo, Airbnb and SK Telecom.
In an investment climate that resembles a Red Queen’s race — innovate or be left behind — Amazon continues to invest heavily in cloud and infrastructure expansion. Its 2025 capital expenditure is expected to exceed US$100 billion, the largest among Big Tech.
The results of prior investments are already visible in AWS’ growing AI capabilities: in 2Q2025 alone, Amazon launched several AI-related products, including the agentic software development platform Kira and the Strands Agents AI builder, and upgraded Bedrock features for building generative AI applications.
This expanded AI portfolio is poised to strengthen AWS’ competitive positioning and accelerate adoption once current supply constraints ease.
Beyond AWS, Amazon’s retail sales rose 11% y-o-y, beating market consensus. Subscription and advertising sales similarly outperformed, with ad sales up 22% y-o-y.
Amazon’s ads segment now contributes just under 10% of total revenue and accounts for a 14% share of the US digital ad market.
The company’s demand-side platform (DSP) has gained momentum in recent quarters through a series of premium partnership announcements with Roku, Netflix and Disney.
Amazon DSP allows advertisers to purchase and run display and video ads both on and off Amazon, leveraging the company’s uniquely rich e-commerce data to target audiences more effectively.
Separately, Amazon stands to benefit from the removal of the de minimis exemption effective from end-August 2025, which had allowed goods under US$800 to enter the US duty-free. Thanks to the tax exemption, China-founded e-commerce players Temu and Shein had previously carved out a foothold in the US through aggressive low pricing. These competitors are now forced to raise prices to absorb higher costs — a setback that is likely a boon to Amazon’s market share.
Ping An Insurance: Latest addition to Absolute Returns Portfolio
On a separate note, we have added Ping An Insurance to the Absolute Returns Portfolio. As one of China’s largest financial conglomerates, Ping An operates across a diverse range of sectors, including insurance, healthcare, banking and fintech.
In some respects, the company bears light parallels to Berkshire Hathaway, which we have held in the Absolute Returns Portfolio since its inception on the thesis of US outperformance. In both cases, the diversified nature of their operations provides meaningful exposure to their domestic markets.
Given our positive view on China’s long-term prospects, Ping An offers an attractive gateway to the broader China market. Relatedly, readers will note that we have opted to invest in Ping An’s Shanghai-listed shares rather than its Hong Kong-listed counterpart. This aligns with our long-term China outperformance thesis, which incorporates expectations for continued yuan appreciation.
Currently, life and health insurance (L&H) is Ping An’s main revenue driver, contributing 63.8% of total profit before tax (PBT) in 1H2025. New business value (NBV) — a measure of profitability from new life policies sold — rose 39.8% y-o-y, up from 35% in the first half of the year.
NBV margins rose eight percentage points to 31%, reflecting a successful — and ongoing — pivot from fixed-benefit to participating policy sales.
The latter helps lift margins because payouts are linked to investment performance rather than guaranteed fixed sums, easing balance sheet pressure in a persistently low interest rates environment.
Indeed, Chinese insurers have been bruised by falling bond yields in recent years, which raise the present value of future policyholder liabilities and weigh on balance sheets.
Positively, the ongoing rally in domestic equities, coupled with the August reinstatement of a 6% value-added tax on interest incomes of certain new bond issues, has prompted a steep sell-off in Chinese government bonds. In turn, this has pushed yields back up from record lows (see Chart 2).
These developments are positive for Ping An. The rebound in bond yields helps ease pressure on its balance sheets, while strong new business momentum and the shift towards participating policies positions the company to capture both market growth and improved margins.
At present, Ping An is trading at historical low valuations, with its share price hovering around book value.
The AI portfolio was up 0.8% for the week ended Sept 24. The gains lifted total portfolio returns to 8.7% since inception. Alibaba, once again, outperformed, its shares gaining 7.6% last week. The other notable gainers were Intuit (+4.8%) and SAP (+2.8%). Amazon, on the other hand, was down 4.5% while RoboSense (-2.0%) and Horizon Robotics (-1.9%) too closed in the red.
The Absolute Returns Portfolio gained 0.9%, boosting total portfolio returns to 43.0% since inception. The top three gaining stocks were Alibaba (+7.6%), CrowdStrike (+6.9%) and SPDR Gold MiniShares ETF (+1.9%). Ping An Insurance (-2.7%), Tencent (-2.0%) and ChinaAMC Biotech ETF (-0.7%) were the three biggest losers last week.
The Malaysian portfolio was up 0.4%, outperforming the benchmark FBM KLCI, which was down 0.7%. Insas Bhd-Warrants C (+33.3%), Hong Leong Industries (+2.9%) and Kim Loong Resources (+1.8%) were the top gainers while Malayan Banking (-1.1%) and LPI Capital (-0.8%) ended lower. Total portfolio returns now stand at 187.1% since inception.
This portfolio is outperforming the benchmark FBM KLCI, which is down 12.6% over the same period, by a long, long way.
Disclaimer: This is a personal portfolio for information purposes only and does not constitute a recommendation or solicitation or expression of views to influence readers to buy/sell stocks, including the particular stocks mentioned herein. It does not take into account an individual investor’s particular financial situation, investment objectives, investment horizon, risk profile and/or risk preference. Our shareholders, directors and employees may have positions in or may be materially interested in any of the stocks. We may also have or have had dealings with or may provide or have provided content services to the companies mentioned in the reports.
