A pedestrian walks past Tencent Holdings's headquarters in Shenzhen, China. Qilai Shen | Bloomberg | Getty Images

Baidu, Alibaba and Tencent, also known as the BATs, are China's tech superstars. After these stocks had a solid run in 2017, market watchers expected them to challenge the market leadership on major U.S. tech names this year. But so far, over $168 billion has collectively been wiped off the BATs' value thanks to a cocktail of factors from the U.S.-China trade war to concerns over valuations and a regulatory crackdown from Beijing. Alibaba shares are down over 11 percent year-to-date, Tencent has plunged 22.4 percent, while Baidu is off more than 6 percent. In comparison, the FANGs — Facebook, Amazon, Netflix and Alphabet — have outperformed the BATs. Amazon is up over 64 percent year-to-date and Netflix has surged more than 91 percent. Alphabet is also higher. Facebook is the only FANG to have fallen this year, following concerns over its ability to police its platform, privacy worries and potential looming regulation. Chinese tech stocks have been hammered in large part due to the global trade war that has hit sentiment toward companies from China.

"For the Chinese internet giants, for many investors they effectively become a proxy for the Chinese economy… and I think that's what you're seeing reflected there. The numbers that we have seen for those companies fundamentally have been very strong but they've sorted traded en masse along with the broader Chinese market," Heath Terry, internet equity research analyst at Goldman Sachs, told CNBC's "Squawk Box Europe" on Thursday. Alibaba is listed and has operations in the U.S. so the trade war has weighed on its shares. On top of this, Jack Ma, the company's founder and current executive chairman, announced plans to step down in 2019. Ma warned Tuesday that the trade issues between the U.S. and China could last for two decades. There have also been concerns over a slowdown in the Chinese economy as well as high valuations of some of the country's internet stocks, that have weighed on share prices. "U.S. tech stocks have been teflon-like in 2018 while the Chinese tech stocks and core bellwethers names have seen hurricane like headwinds. The combination of softer than expected prints from the major players on the consumer front, a slowdown in the Chinese economy, and valuation worries have plagued Chinese tech stocks this year," Daniel Ives, managing director of equity research at Wedbush Securities, told CNBC by email Thursday.

Tencent troubles

While the trade war is a big problem for Alibaba, Tencent has faced its own issues at home. The company is the biggest BAT stock by market capitalization and makes a large chunk of its revenues from games. But the Chinese government has cracked down on some of Tencent's titles. In August, the regulator stopped Tencent from selling the blockbuster game "Monster Hunter: World" on its distribution platform, WeGame. The authorities then published a document outlining their concern over rising eye problems among China's youth. One recommendation it suggested was to restrict the number of new game approvals. As a result, Tencent is the worst-performing BAT stock this year.

Buying opportunity

Despite the pressure on Chinese internet names, many analysts are still bullish on the companies longer term and see the current weakness as an opportunity to buy. Chris Bertelsen, CEO of Aviance Capital Management, said the trade war with the U.S. is likely to calm down and investors should buy major Chinese tech stocks now before the opportunity passes.