Artisan Select Equity Fund Sold Its Holdings in Alibaba Group Holding Limited (BABA). Here’s Why

Artisan Partners, an investment management company, released its “Artisan Select Equity Fund” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. The US market was one of the world’s worst-performing markets in Q1. Against this backdrop, the fund’s Investor Class ARTNX, Advisor Class APDNX, and Institutional Class APHNX returned 5.79%, 5.85%, and 5.82%, respectively, in the first quarter, compared to a -4.27% return for the S&P 500 Index. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2025.

In its first-quarter 2025 investor letter, Artisan Select Equity 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 -4.28%, and its shares gained 52.99% of their value over the last 52 weeks. On June 5, 2025, Alibaba Group Holding Limited (NYSE:BABA) stock closed at $119.96 per share, with a market capitalization of $287.746 billion.

Artisan Select Equity Fund stated the following regarding Alibaba Group Holding Limited (NYSE:BABA) in its Q1 2025 investor letter:

“Alibaba Group Holding Limited’s (NYSE:BABA) share price climbed 56%. This was clearly a welcome development. Unfortunately, it does not change the fact that this has been a failed investment for us. China was the best performing market in the world with a 15%gainduringQ1.Alibaba’s e-commerce business also showed signs of life as results stabilized relative to the rest of the Chinese e-commerce industry. Alibaba may also be emerging as the artificial intelligence (AI) leader in China. Since the US is essentially in a cold war with China, at least on the technology front, we felt that Alibaba’s success in AI (a critical national security focus) makes it a potential target for the Trump administration.

This is why we sold half of our position during the quarter. We sold the rest of it after the quarter ended in response to the “Liberation Day” tariffs. We assumed that China and the US would likely escalate their long-standing trade war.”

Analyst Explains Why He Sold Alibaba Group (BABA) - ‘Gave This Trade 90 Days to Work’

An e-commerce platform displaying a wide range of products to customers online.

Alibaba Group Holding Limited (NYSE:BABA) is in 17th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 125 hedge fund portfolios held Alibaba Group Holding Limited (NYSE:BABA) at the end of the first quarter, which was 107 in the previous quarter. While we acknowledge the potential of Alibaba Group Holding Limited (NYSE:BABA) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Alibaba Group Holding Limited (NYSE:BABA) and shared Jackson Peak Capital’s views on the company. In addition, please check out our hedge fund investor letters Q1 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.