30. Alibaba (BABA)
Number of Hedge Funds: 115 (2025Q4)
Number of Hedge Funds: 130 (2025Q3)
As of March 1, 2026, the movement in Alibaba Group Holding Limited (BABA) positions suggests a sophisticated “rebalancing” among the world’s most elite managers. While the total number of bullish funds has moderated to 115, the high-conviction “smart money” is doubling down on Alibaba’s massive AI and emerging market potential.
1. High-Conviction “Smart Money” Accumulation
While some generalist funds have stepped away, the most specialized and successful managers are aggressively increasing their stakes:
- Hillhouse Capital Management (Lei Zhang): This powerhouse Asia-focused firm signaled massive conviction by increasing its position by 66% in the latest filing period. Alibaba now makes up a staggering 25.65% of their total portfolio.
- Fisher Asset Management (Ken Fisher): The firm maintained its steady support, holding over 5.3 million shares valued at approximately $782 million.
- Citadel Investment Group (Ken Griffin): While trimming its options positions, Citadel remains a dominant force with billions in gross exposure, maintaining a strategic “Call” position valued at $1.43 billion.
2. The Bull Case for 2026: AI and “Queen 3.5”
The institutional interest is being refueled by Alibaba’s aggressive pivot into the global AI race:
- The “Queen 3.5” Launch: Alibaba recently countered analyst skepticism with the launch of its Qwen3.5 AI model, which is being viewed as a critical catalyst for its Cloud and e-commerce wings.
- Dominant Emerging Markets Play: As of February 2026, many top analysts, including those at Jefferies, still view Alibaba as a “compelling buy.” Jefferies maintains a Buy rating with a price target of $225, representing significant upside from current levels.
- Zacks and Institutional Consensus: Despite short-term volatility, the stock was recently highlighted as one of the “10 Best Emerging Markets Stocks to Buy Right Now,” with institutions focusing on its long-term low-volatility profile.
3. Tactical Trimming vs. Core Conviction
The decline from 130 to 115 funds reflects a “thinning out” of less committed investors who are concerned about slowing growth in core commerce.
- Appaloosa Management (David Tepper): David Tepper’s fund trimmed its stake by 21% recently. However, even after this reduction, BABA remains a massive 10.88% of his total portfolio, showing that his “core” bullish thesis remains intact.
- Investor Letter Signals: Firms like Sustainable Growth Advisers (SGA) noted in their Q4 investor letter that while core commerce has faced headwinds, the “smart money” is looking toward 2026 for a rebound driven by technological synergies.
Summary Verdict
The drop to 115 funds isn’t a sign of “souring”—it’s a flight to quality. The fact that specialized firms like Hillhouse Capital are boosting their stakes by 66% suggests that the investors who know the Chinese market best are the ones buying the most. With an analyst consensus target of $225, the elite managers who stayed are betting on a massive 2026 recovery fueled by AI.
