Alluvium Asset Management, an asset management company, released its “Conventum – Alluvium Global Fund” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the quarter, the Fund was up 1.7% in USD terms and 1.1% in AUD terms but down 2.4% in EUR terms due to a strengthening currency. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Conventum – Alluvium Global 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 -8.09%, and its shares gained 54.49% of their value over the last 52 weeks. On June 10, 2025, Alibaba Group Holding Limited (NYSE:BABA) stock closed at $115.03 per share, with a market capitalization of $278.996 billion.
Conventum – Alluvium Global Fund stated the following regarding Alibaba Group Holding Limited (NYSE:BABA) in its Q1 2025 investor letter:
“Alibaba Group Holding Limited (NYSE:BABA) was the standout this month, with a return of 55.3%. Alibaba has traditionally been an e-commerce business, but it is now rapidly expanding its cloud / AI operations. And management sees no end to this growth, with demand for these services being well above its expectations. It states that “AI revenues” (no definition provided), have now more than doubled (on a year on year basis) for six consecutive quarters. And although it admits there is no clear path as to how the broader AI opportunities will be monetised, from Alibaba’s perspective, it simply stems from providing the infrastructure. So management has signaled a significant ramp up in capital spending to accommodate. Alibaba has been a terrible performer over the past four years. We suspect this was part due to the poor economic environment in China, part due to its e-commerce business failing to meet expectations (even after accommodating for the poor consumer environment) and part due to deteriorating relations with the authorities (which increased perceived investment risks). But there has been more positive news recently, with the suggestions that it is the prime provider of AI services to Apple in China, and the announcement of a partnership with BMW to integrate a bespoke AI engine into its Intelligent Personal Assistant. Up until recently, we were comfortable with the Fund’s Alibaba’s position because its share price was materially lower than our view of its value (which did not account for a rapidly growing cloud business). That upside from its cloud / AI operations, and perhaps from a more collaborative relationship with the Chinese government (which now seems evident), appears (at least to us) to now largely be factored in its share price. This prompts us to closely consider this position, which has grown to 4.2% of the Fund.”
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 the list of most undervalued retail stocks to buy. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of BABA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.
Disclosure: None. This article is originally published at Insider Monkey.
