Alibaba Group Holding Limited (NYSE: BABA) has been identified as a top-performing stock in the third quarter of 2025, according to an investor letter from the Oakmark Global Select Fund. The technology company's significant stock price increase was primarily driven by strong performance in its cloud computing and artificial intelligence sectors, reflecting rapid advancements in China's AI landscape.
The company's shares gained 57.69% in value over the past 52 weeks, closing at $173.68 per share on October 8, 2025. This performance has drawn positive attention from investment funds, even as hedge fund interest has seen a slight decline.
Key Takeaways
- Alibaba was highlighted as a top contributor in the Oakmark Global Select Fund's Q3 2025 investor letter.
- The stock's growth is linked to strong results from its Cloud and AI divisions.
- Over the last 52 weeks, Alibaba's shares increased in value by 57.69%.
- The company reported revenue of RMB 247.7 billion for its fiscal first quarter of 2026.
Oakmark Fund Highlights Alibaba's Performance
In its third-quarter 2025 investor letter, the Oakmark Global Select Fund singled out Alibaba as its top contributor for the period. The fund, managed by Harris Associates, noted that the China-based technology conglomerate experienced a significant stock price increase following its latest earnings report.
The report highlighted the company's success in leveraging the fast-growing Chinese AI market. Oakmark expressed confidence in Alibaba's long-term prospects, citing its early investments in artificial intelligence and its established market position.
"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."
The fund also pointed to positive developments in other areas of Alibaba's business. According to the letter, the company is seeing "solid traction in both its International and Instant Commerce businesses." This diversification is seen as a key strength for sustained growth.
Financial Metrics and Market Position
Alibaba's market performance reflects the optimism shared by investors. As of October 8, 2025, the company's stock closed at $173.68 per share, contributing to a market capitalization of $413.157 billion. The stock's one-month return was recorded at 12.01%, indicating strong short-term momentum.
Alibaba by the Numbers (Q3 2025)
- Stock Price (Oct 8, 2025): $173.68
- Market Capitalization: $413.157 Billion
- 52-Week Gain: 57.69%
- Fiscal Q1 2026 Revenue: RMB 247.7 Billion
Financially, the company remains robust. For the fiscal first quarter of 2026, Alibaba reported total revenue of RMB 247.7 billion. This figure underscores the scale of its operations across e-commerce, cloud services, and logistics.
Despite the strong performance, data shows a slight shift in institutional ownership. At the end of the second quarter of 2025, 101 hedge fund portfolios held positions in Alibaba, a decrease from 125 in the preceding quarter. This suggests some funds may have taken profits or reallocated capital, though a significant number still maintain holdings.
AI and Cloud Computing as Key Growth Drivers
The core of Alibaba's recent success lies in its cloud computing division. The segment delivered healthy revenue growth, a trend that company management expects to persist in the upcoming quarters. This performance is directly tied to the increasing demand for AI-powered services and infrastructure in China.
The Role of Cloud in AI Development
Cloud computing platforms like Alibaba Cloud provide the essential infrastructure for developing and deploying artificial intelligence models. This includes massive data storage, powerful processing capabilities, and scalable services, which are critical for training complex AI systems. As more businesses adopt AI, the demand for these cloud services grows.
Alibaba has strategically positioned itself as a key player in this technological shift. Having been one of the early investors in Chinese AI, the company has developed advanced capabilities that it can now offer to a wide range of clients through its cloud platform.
According to Oakmark's analysis, this leading market position allows Alibaba to unlock further value over time. The ability to provide both the infrastructure and the AI tools creates a powerful ecosystem that attracts and retains customers, from startups to large enterprises.
Future Outlook and Strategic Position
Looking ahead, Alibaba's strategy appears focused on three main pillars: its domestic e-commerce foundation, international expansion, and technological innovation in cloud and AI. The company's management has signaled confidence that the current momentum, particularly in its technology-focused segments, is sustainable.
The growth in its International Commerce and Cainiao (logistics) segments complements its core technology business. A strong global presence provides new revenue streams and diversifies the company's operations beyond the domestic Chinese market, mitigating regional economic risks.
The company's ability to integrate its e-commerce data with its cloud and AI capabilities provides a distinct competitive advantage. This synergy allows for the development of more sophisticated services, from personalized shopping experiences to optimized supply chain management, further solidifying its market leadership.