Tencent CEO Pony Ma Huateng, Alibaba's Jack Ma and Baidu CEO Robin Li, attend the China IT Summit 2017 at Shenzhen Wuzhou Guest House. VCG | Getty Images

At the start of the year, China's largest technology companies known as the BATs, or Baidu, Alibaba and Tencent, looked unstoppable. Things continued to go very well for the big three throughout the first half of the year, with all of the firms' share share prices hitting record highs. But since the summer, investors in the BATs have been tearing their hair out as stock prices began to fall, ruining the decent start to 2018. Collectively, the BATs have lost around $165 billion in value year-to-date, each for their own reasons. U.S.-listed Alibaba and Baidu have been caught up in the broader sell-off in Chinese stocks resulting from weak sentiment because of the U.S.-China trade war. Tencent, meanwhile, has been hit by regulatory woes. The Chinese government has raised concerns about eye problems in the world's second-largest economy and cited video games as one of the causes. Beijing suggested slowing down approvals of new games. Tencent makes a huge amount of money from games and concerns over the future of this part of its business have weighed on its stock. But looking beyond the trade war rhetoric and short term problems, the BATs certainly have enough firepower to have market leadership. They also pose a major challenge to major U.S. tech names known as the FANGs or Facebook, Amazon, Netflix and Alphabet, the parent company of Google.

Just look at the growth and size of their businesses. Tencent grew 30 percent year-on-year in the second quarter of the year, Alibaba increased revenues 61 percent, while Baidu saw 32 percent growth. All of these business are expanding rapidly into new geographies and areas. Tencent's massive games business continues to have traction despite regulatory issues and the giant also owns WeChat, China's most popular messaging app with over a billion monthly users. Tencent is pushing WeChat Pay, the payments service that runs within WeChat. Alibaba continues to grow its core commerce business, while Baidu, which has seen hits to its core search business, has been investing heavily in artificial intelligence and autonomous cars. The BATs have also spent billions of dollars investing in other companies, to the point where they are not only technology firms, but investors too. Bernstein Analyst Bhavtosh Vajpayee recently dubbed Tencent the "SoftBank of China." SoftBank is the Japanese firm that has its own $100 billion Vision Fund which it invests in big tech firms across the world.