Will Alibaba Group (BABA) be Able to Leverage Its Capabilities?

Oakmark Funds, advised by Harris Associates, released its “Oakmark Global Fund” fourth-quarter 2025 investor letter. The fund’s objective is long-term capital appreciation by investing in a diverse group of U.S. and non-U.S. companies. The all-cap mandate of the fund allows it to invest across all market-cap companies. A copy of the letter can be downloaded here. In the fourth quarter, the fund (Investor Class) delivered a return of 5.23%, outperforming the benchmark MSCI World Index’s 3.12% gain. In addition, you can check the Fund’s top five holdings to determine its best picks for 2025.

In its fourth-quarter 2025 investor letter, Oakmark Global Fund highlighted stocks such as Alibaba Group Holding Limited (NYSE:BABA). Alibaba Group Holding Limited (NYSE:BABA) is a Chinese-based technology company that provides technology infrastructure and marketing reach. The one-month return of Alibaba Group Holding Limited (NYSE:BABA) was 13.54%, and its shares gained 102.58% of their value over the last 52 weeks. On January 12, 2026, Alibaba Group Holding Limited (NYSE:BABA) stock closed at $167.01 per share, with a market capitalization of $398.707 billion.

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

"Alibaba Group Holding Limited (NYSE:BABA) was the top detractor during the quarter. The China-headquartered technology conglomerate’s stock price declined as it reported mixed results. The core E-commerce business continues to perform well, and Cloud revenue growth is accelerating. However, the company’s earnings were negatively impacted due to significant spending on subsidies to grow their Quick Commerce business, in our opinion. We believe losses from Quick Commerce will be reduced over time and 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 think it can leverage its advanced capabilities and leading market position to unlock further value."

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, 130 hedge fund portfolios held Alibaba Group Holding Limited (NYSE:BABA) at the end of the third quarter, which was 101 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 the list of best NYSE stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q4 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.