HONG KONG, Nov 21 (Reuters) - U.S. hedge funds raised

their investments in U.S.-listed Chinese firms in the third

quarter, with e-commerce retailer JD.com ( JD ) and data centre

operator GDS Holdings ( GDS ) leading the purchases, a Goldman

Sachs note reviewed by Reuters showed.

U.S. hedge funds' exposure to Chinese stocks traded in the

world's largest capital market, rose to the highest level since

late 2021, according to the note to clients on Wednesday.

About 25% of U.S. long-short equity funds held a long

position in at least one so-called China ADRs (American

Depository Receipts) at the beginning of the fourth quarter, the

investment bank said.

E-commerce giant JD.com ( JD ) was the most popular, attracting 47

hedge funds and seeing a net increase of 26 funds boosting their

ownership in the third quarter.

Following JD.com ( JD ) were data centre operator GDS and hotel

chain Atour Lifestyle Holdings ( ATAT ), reflecting investors'

optimism for a recovery in consumption and growth in artificial

intelligence demand.

The return to Chinese stocks by Wall Street's fast money

came amid a sudden stock rally in late September when China

announced a series of economic stimulus pledges. However, this

sentiment quickly faded as shares corrected recently due to the

fiscal spending plan falling short of expectations and potential

U.S. tariff risks in the wake of Donald Trump's election win.

Separate 13-F regulatory filings showed billionaire David

Tepper's Appaloosa Management increased its investment in JD.com ( JD )

by 69% while more than doubling its stake in e-commerce platform

PDD Holdings ( PDD ) in the three months through September.

Scion Asset Management's Michael Burry, known for his timely

bets against the housing sector ahead of the 2008 financial

crisis, doubled his long positions in JD.com ( JD ) in the third

quarter. However, he also increased bearish positions on the

same stock to limit potential losses.