11 Best Consumer Cyclical Stocks to Buy According to Hedge Funds

2. Alibaba Group Holding Limited (NYSE:BABA)

Number of Hedge Fund Holders: 101

Alibaba Group Holding Limited (NYSE:BABA) is one of the Best Consumer Cyclical Stocks to Buy According to Hedge Funds. On August 29, Jefferies analyst Thomas Chong lifted the price objective on the company’s stock to $165 from $150, while maintaining a “Buy” rating, as reported by The Fly. As per the analyst, Alibaba Group Holding Limited (NYSE:BABA) posted a healthy set of June quarter results. Also, the firm anticipates the company to reach a new milestone and tap the next phase of growth ahead.

In the June quarter, Alibaba Group Holding Limited (NYSE:BABA)’s strategic emphasis on consumption and AI + Cloud posted healthy growth. The company generated significant synergies through combining the resources of its consumer platforms, which resulted in new highs in monthly active consumers as well as daily order volume.  Alibaba Group Holding Limited (NYSE:BABA) rolled out the “Taobao Instant Commerce” service on the Taobao app at April end to cater to the consumer needs for on-demand delivery throughout a wide range of product categories, such as food, groceries, electronics, and apparel. As a result, the Taobao app’s leadership strengthened in China’s e-commerce industry.

Alluvium Asset Management, an asset management company, released its Q2 2025 investor letter. Here is what the fund said:

“Alibaba Group Holding Limited (NYSE:BABA) was down 12.8%. Bear in mind, this comes off a stunning 55.3% March quarter return. Alibaba reported full year results, and by all accounts they were pretty good. Market chatter suggests some were disappointed by the Cloud revenue, but with 18% growth over the last year, we are not complaining. We liked the continuation of share buybacks, noting that for the year ended 31 March 2025, it bought back over 5% of its shares. Our Alibaba holding accounts for 3.3% of the Fund. We wrote last quarter that we were closely monitoring the position (hinting toward selling). We chose not to act, largely because we see it as one of the cheaper and most direct ways for the Fund to benefit from AI initiatives and Cloud infrastructure growth, and at the same time it provides geographic and economic diversity.”