The S&P 500 is currently hovering near a record high, but the index has remained almost flat since the beginning of May. That stagnation has been attributed to uncertainties about the Trump Administration's policies, the anticipation of interest rate hikes later this year, and historically high valuations for the overall market.

But as the U.S. market remains stuck in neutral, Chinese tech stocks have thrived, sparked by impressive growth figures and their detachment from U.S.-centered issues. Let's examine three stocks in that industry which have already rallied more than 30% this month -- Baozun (NASDAQ:BZUN), Weibo (NASDAQ:WB), and SINA (NASDAQ:SINA).

A robot holds a Chinese flag.

Image source: Getty Images.

Baozun

Baozun is a Chinese e-commerce company that provides IT services, digital storefronts for online marketplaces, marketing campaigns, customer service, and fulfillment services for its customers. Like Shopify, it's basically a "one-stop shop" for businesses that need to quickly establish an e-commerce presence.

Shares of Baozun have rallied 30% since the beginning of May. The stock rose ahead of its first quarter report on May 16, dipped briefly after Baozun beat revenue estimates but only matched earnings expectations, but rebounded as healthy growth figures from e-commerce giant JD.com (NASDAQ:JD) and Weibo revived investor interest in Chinese tech stocks.

The main threat to Baozun is that big online marketplaces like JD.com and Alibaba's Tmall could launch similar platforms and cut Baozun out of the loop. But in the U.S., Amazon fully partnered with Shopify instead of competing against it -- so it's possible that JD.com and Alibaba will do the same.

Analysts expect Baozun's revenue and earnings to respectively grow 25% and 121% this year as more businesses try to reach China's growing internet population. Its P/E ratio of 89 looks high relative to its industry average of 43, but it can be justified by its earnings growth rate.

Weibo and SINA

Back in 2014, Chinese online media giant SINA spun off Weibo, its microblogging site, as a separate publicly traded company. SINA retained a majority stake in Weibo, and Alibaba became the new company's second largest investor.

Weibo's mobile app.

Weibo's mobile app. Image source: Google Play.

As a result, these three tech giants' ecosystems are deeply intertwined. For example, Weibo users can directly access headlines from SINA's news portal and make e-commerce purchases and payments with Alibaba's Alipay platform. This alliance is considered a defensive measure against Tencent's (NASDAQOTH:TCEHY) popular messaging app WeChat, which has expanded over the past few years into a monolithic app for games, mobile payments, and online-to-offline services like hailing cabs and ordering food.

Weibo and SINA both crushed analyst expectations in their most recent quarters. Weibo's revenue and non-GAAP earnings respectively surged 67% and 254%, fueled by a 71% jump in ad revenues and 30% growth in monthly active users to 340 million -- which gives it a larger overall audience than Twitter. Analysts expect Weibo's revenue and earnings to respectively rise 57% and 79% this year. 

SINA's revenue, heavily boosted by its stake in Weibo, rose 40% annually last quarter. Its non-GAAP earnings of $0.50 per share also marked a big improvement from its loss of $0.04 per share in the prior year quarter. Analysts expect SINA's revenue and earnings to respectively rise 39% and 81% this year.

Those massive growth figures explain why Weibo and SINA respectively rallied 46% and 36% since the beginning of May. However, Weibo's P/E of 119 is much higher than its industry average of 37 and its projected earnings growth rate -- so it could be vulnerable to a big sell-off. By comparison, SINA's P/E of 32 looks much cheaper.

But mind the risks...

Chinese tech stocks can be very volatile, so they definitely aren't for queasy investors. Their high valuations also indicate that they could easily be cut in half during a major market downturn. Investors should also be aware that a slowdown in the Chinese economy could cause big declines in ad spending.

Regulators could also throttle spending on ads and e-commerce platform with new regulations or by cracking down on controversial live streaming platforms, which have become a gold mine for companies like Weibo. Investors should fully understand these risks before picking up any stocks from this high-growth market.

Leo Sun owns shares of Amazon, Tencent, and Weibo. The Motley Fool owns shares of and recommends Amazon, Shopify, and Twitter. The Motley Fool recommends Sina and Weibo. The Motley Fool has a disclosure policy.