Michael Burry, the investor made famous in The Big Short, recommends bargain hunting in Hong Kong's stock market after it lagged peers during the global AI rally this year. Burry, who runs Scion Asset Management, sees the city's benchmark Hang Seng Index trading at a significant discount to global peers despite improving fundamentals. The index has underperformed major markets as AI-driven gains concentrated in U.S. mega-cap technology stocks.

Hong Kong equities face headwinds from China's property crisis and geopolitical tensions, but valuations have compressed to historically low levels. Burry's contrarian view suggests the pessimism may be overdone, creating opportunities for patient investors. The region's technology and consumer sectors could benefit from any stabilization in China's economy or easing of regulatory pressures.

While risks remain elevated, the asymmetric risk-reward profile aligns with Burry's deep-value approach. Investors should monitor policy developments in Beijing and corporate earnings for signs of a sustainable turnaround.