ETF Spotlight: BABX Bull Run Fueled by Nvidia News
- Alibaba is China’s second-largest tech company by market cap.
- BABX is a leveraged single-stock ETF, meaning it’s designed for short-term tactical trading, not long-term holding.
A surprising winner from this week’s news that Nvidia Corp. (NVDA) will soon resume sales of its AI chips to China is Chinese tech giant Alibaba Group Holding Ltd. (BABA).
Shares of Alibaba surged more than 8% after the news broke, helping propel the GraniteShares 2x Long BABA Daily ETF (BABX) to a 16% daily gain. The leveraged ETF, which provides 2x exposure to Alibaba’s stock, is now up nearly 60% year to date and has attracted $33 million in inflows in 2025. Its total assets under management currently sit at around $110 million.
Alibaba, China’s second-largest tech company by market cap after Tencent Holdings Ltd. (TCEHY), stands to benefit meaningfully from renewed access to Nvidia’s powerful AI chips. The company has been aggressively developing AI applications and large language models, including its Qwen family of LLMs, and is positioning itself as a key player in both cloud computing and enterprise AI services.
The chips that power cutting-edge AI workloads are essential for Alibaba’s ambitions, both as a developer of applications and as a cloud provider offering AI capabilities to customers. Gaining access to Nvidia’s hardware, long considered the gold standard in AI computing, could significantly improve the company’s competitiveness in both domestic and global markets.
BABX Offers Targeted Exposure
While Nvidia itself and the ETFs that hold it—like the Invesco QQQ Trust (QQQ), the VanEck Semiconductor ETF (SMH) or the GraniteShares 2x Long NVDA Daily ETF (NVDL)—remain the most direct ways to bet on the AI boom, funds like BABX offer a more targeted way to bet on how U.S.-China chip policy could impact Chinese tech stocks.
But while the etf.com Spotlight is on BABX this week, investors should be cautious. BABX is a leveraged single-stock ETF, meaning it’s designed for short-term tactical trading not long-term holding. The compounding effects of daily leverage can lead to significant performance decay over time, especially in volatile markets.
For a broader, less risky approach to the Chinese tech sector, the KraneShares CSI China Internet ETF (KWEB) may be worth a look. It holds Alibaba as its second-largest position, with an 8.7% weight. KWEB rose around 4% on the Nvidia news, far less dramatic than BABX but still notable. The fund is up 21% year to date.
