If the U.S.-China Trade Reset Holds, These 3 Stocks Could Fly

Key Points

• Despite slightly lighter earnings, BABA stock is up 45% in 2025, providing a potential entry point for investors.
• Resolving the trade dispute may give U.S. investors a reason to own BYD stock, even if they can’t buy their cars.
• Tencent's AI-driven ad sales and gaming revenue surged, showcasing promising international ambitions.

On May 11, the United States and China agreed to a 90-day pause in their trade dispute. The United States agreed to slash tariffs from 145% to 30%, and China agreed to reduce its reciprocal tariffs from 125% to 10%.

The glass-half-empty crowd will fall back on the saying: the devil is in the details. Even in the best of times, Chinese stocks carry some risk. Even though the companies are listed on U.S. exchanges, there is an opaqueness to the companies' finances that can be troubling. Now add in weakness in the Chinese economy and the overhang of a trade war, and you can understand why investors want some clarity.

However, there’s plenty of reason to be optimistic about this news. A more productive trade relationship between the two countries will boost investor confidence, support technological advancements, and enable global expansion.

With that in mind, here are three companies that are having strong years, but may be among the biggest beneficiaries of a trade deal between the United States and China.

A Pullback May Create an Opportunity in BABA Stock

Alibaba Group Holding Ltd. NYSE: BABA is one of the world’s largest e-commerce and cloud computing companies. Like many software companies, Alibaba’s AI initiatives shouldn’t face too much tariff trouble.

The same can’t be said for its e-commerce business. One way that Alibaba could benefit from easing tariff restrictions is with its AliExpress platform, which generates a significant amount of international revenue. The opportunity for this business is a key reason BABA stock jumped over 5% on the day after the pause was announced.

Alibaba reported earnings just a few days after the tariff pause was announced. On May 15, the company posted $32.6 billion (236.5 billion Chinese yuan). That was slightly lighter than analysts’ forecasts, but it was up 7% year-over-year (YOY). However, the company’s earnings per share of $1.74 were lighter than estimates of $1.78.

That was enough to cause investors to take some profit off the table. BABA stock is up 45% for the year as of May 15. With the stock falling below its 50-day simple moving average (SMA), investors may be getting a better entry point.

A Trade Agreement May Allow BYD to Press Its Advantage

The electric vehicle (EV) market hasn’t revved up in the United States as many expected. The same can’t be said of China. That’s why BYD Co. OTCMKTS: BYDDF stands to be a winner from a better trade environment.

Although it outpaces Tesla Inc. NASDAQ: TSLA by many key metrics, many U.S. consumers may not be familiar with BYD. Existing tariff policy makes it difficult to impossible for BYD to sell its cars in the United States. But the company has invested in creating a manufacturing footprint in the United States and is also considering building a plant in Mexico.

However, for now, the country generates virtually all of its revenue in China. It’s also popular in many other Southeast Asian countries, including Singapore, where it recently topped Toyota Motor Corp. NYSE: TM in sales for the year.

Investors, however, are very familiar with the company. BYDDF stock is up 57% in 2025. That's continuing the strong performance that started last year and has rewarded investors with an 89% gain in the last 12 months.

BYD crushed its first quarter 2025 numbers. Revenue of $23.47 billion was 34% higher YOY. It was an even stronger story with earnings per share of 42 cents, coming in 90% higher YOY.

Global Expansion and AI-Driven Growth: Tencent's Path Forward

Like Alibaba, Tencent Holdings Limited OTCMKTS: TCEHY reported earnings a few days after news of the tariff pause. The company delivered revenue of $24.98 billion, which was 13% higher YOY. Tencent cited a surge in gaming revenue as well as AI-driven growth in ad sales for the strong report. The revenue growth was so strong that investors overlooked a slight miss on earnings.

Like many of U.S. technology stocks, Tencent is making significant investments in AI. This report shows that those investments are starting to generate tangible benefits for investors.

Of the three companies on this list, Tencent is less obviously impacted by tariff concerns. Most of the company’s revenue is generated in China. Still, the company has international ambitions that will be made easier with a better trade environment. TCEHY stock is up 27.6% in 2025 and 31.5% in the last 12 months.