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Rapid Chinese AI Growth Lifted Alibaba Group (BABA) Higher in Q3

By Soumya Eswaran | October 10, 2025, 8:58 AM

Oakmark Funds, advised by Harris Associates, released its “Oakmark Global Select Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund underperformed its benchmark, the MSCI World Index, in the third quarter and since its inception. The largest performance contributors were consumer discretionary and consumer staples, at the sector level, while industrials and financials detracted. In addition, you can check the top 5 holdings of the fund to know its best picks in 2025.

In its third-quarter 2025 investor letter, Oakmark Global Select Fund 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 12.01%, and its shares gained 57.69% of their value over the last 52 weeks. On October 8, 2025, Alibaba Group Holding Limited  (NYSE:BABA) stock closed at $173.68 per share, with a market capitalization of $413.157 billion.

Oakmark Global Select Fund stated the following regarding Alibaba Group Holding Limited (NYSE:BABA) in its third quarter 2025 investor letter:

"Alibaba Group Holding Limited (NYSE:BABA) was the top contributor during the quarter. The China-headquartered technology conglomerate’s stock price rose significantly following earnings that reflected rapid Chinese AI growth. Its Cloud segment posted healthy revenue growth, and management indicated that this momentum is expected to continue in the coming quarters. Additionally, Alibaba has solid traction in both its International and Instant Commerce businesses. We continue to believe the company is well-positioned for long-term growth, having been one of the early investors in Chinese AI. Over time, we believe it can leverage its advanced capabilities and leading market position to unlock further value."

Alibaba (BABA) Soars 8% on US Chip Exports Ease to China

Alibaba Group Holding Limited (NYSE:BABA) is in the 17th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 101 hedge fund portfolios held Alibaba Group Holding Limited (NYSE:BABA) at the end of the second quarter, which was 125 in the previous quarter. In the fiscal first quarter of 2026, Alibaba Group Holding Limited (NYSE:BABA) reported revenue of RMB 247.7 billion. 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 JB Global Fund's views on the company. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

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

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