Alibaba Group Holding Limited (BABA) Rose Following an Acceleration in Cloud Revenue

Baron Funds, an investment management company, released its “Baron Emerging Markets Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund returned 10.89% (Institutional Shares) in the third quarter compared to a 10.64% return for the MSCI Emerging Markets Index (the Benchmark) and a 11.48% return for the MSCI Emerging Markets IMI Growth Index (the Proxy Benchmark). YTD, the fund returned 31.79% compared to 27.53% and 28.19% for the indexes. The firm was satisfied with the quarterly results, particularly given the underperformance of Indian equities during that period, but it is still well ahead of both the Benchmark and the Proxy Benchmark on a year-to-date and one-year trailing basis. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Baron Emerging Markets 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 -1.23%, and its shares gained 75.28% of their value over the last 52 weeks. On December 09, 2025, Alibaba Group Holding Limited (NYSE:BABA) stock closed at $155.96 per share, with a market capitalization of $372.126 billion.

Baron Emerging Markets Fund stated the following regarding Alibaba Group Holding Limited (NYSE:BABA) in its third quarter 2025 investor letter:

“Alibaba Group Holding Limited (NYSE:BABA) is the largest retailer and e-commerce company in China. Alibaba operates shopping platforms Taobao and Tmall, and has businesses spanning logistics, local services, digital media, and cloud computing. Shares rose during the quarter due to an acceleration in cloud revenue, driven by AI and positive momentum in quick commerce. Alibaba is ramping capital expenditures over the next three years, committing more than $53 billion to build out its cloud infrastructure layer and add AI capabilities to existing applications, such as consumer search. Within the company’s e-commerce business, quick commerce is showing strong early traction, and management is focused on substantially improving unit economics. We retain conviction that Alibaba is well positioned to benefit from China’s ongoing growth in e-commerce and cloud, although competitive concerns remain.”

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, 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 risk and potential of Alibaba Group Holding Limited (NYSE:BABA) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Alibaba Group Holding Limited (NYSE:BABA) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Alibaba Group Holding Limited (NYSE:BABA) and shared the list of best low volatility investments in December 2025. In addition, please check out our hedge fund investor letters Q3 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.