Here's What Justified Alibaba's (BABA) Appreciation Over Time

JDP Capital Management, an investment management company, released its “Survivor & Thriver Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The beginning of 2025 marked one of the most challenging starts to a market year since the COVID outbreak. Following a decline of more than 20% in March and early April, the S&P 500 demonstrated one of the quickest V-shaped recoveries ever, regaining all of its losses by June. In this environment, the fund was up 19.2% in 2Q and 16.8% in the first half of 2005, outperforming the S&P 500’s 10.6% gain in 2Q and 6.2% gain in the first half, including dividends. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its second-quarter 2025 investor letter, JDP Capital Management highlighted stocks such as Alibaba Group Holding Limited (NYSE:BABA). Alibaba Group Holding Limited (NYSE:BABA) provides technology infrastructure and marketing reach. The one-month return of Alibaba Group Holding Limited (NYSE:BABA) was 5.78%, and its shares gained 54.05% of their value over the last 52 weeks. On August 12, 2025, Alibaba Group Holding Limited (NYSE:BABA) stock closed at $122.42 per share, with a market capitalization of $291.891 billion.

JDP Capital Management stated the following regarding Alibaba Group Holding Limited (NYSE:BABA) in its second quarter 2025 investor letter:

"Beyond near-term earnings, large Chinese tech companies often hold substantial stakes in other leading tech companies that they once funded. Alibaba Group Holding Limited (NYSE:BABA), for instance, trades at a ~$270 billion market cap but holds ~$85 billion in equity investments on its balance sheet. This includes a 33% stake in Ant Group, regarded as China’s dominant fintech platform and often compared to a combination of Amazon, Visa, and PayPal. If Ant were to IPO at the roughly $200+ billion estimated valuation, Alibaba’s stake would be worth ~$60 billion, or about 25% of its current market capitalization. While Alibaba’s core e-commerce growth is under pressure, the balance sheet holdings are attractive enough to help justify a doubling of BABA over a reasonable period of time."

Alibaba Group Holding Limited (NYSE:BABA) is in 17th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 125 hedge fund portfolios held Alibaba Group Holding Limited (NYSE:BABA) at the end of the first quarter, which was 107 in the previous quarter. While we acknowledge the potential of Alibaba Group Holding Limited (NYSE:BABA) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Alibaba Group Holding Limited (NYSE:BABA) and shared the list of most profitable NYSE stocks to buy. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.