JB Global Capital, an investment firm, released its fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. During Q4 2025, JB Global Capital reported an 8.9% decline, largely driven by a sharp drop in Alibaba, its largest holding, while global markets posted modest gains. Despite the quarter’s setback, the fund delivered a strong full-year return of 67.5% and stands at 108.9% since inception, outperforming major benchmarks. The letter explains that 2025 market gains were heavily concentrated in a small group of mega-cap tech companies, which the fund largely avoids due to valuation discipline. However, the managers remain focused on fundamentals and believe this approach will benefit long-term performance as market leadership shifts. Additionally, please check the fund’s top five holdings to know its best picks in 2025.
In its fourth-quarter 2025 investor letter, JB Global Capital highlighted stocks such as Alibaba Group Holding (NYSE:BABA). Alibaba Group Holding (NYSE:BABA) is a Chinese multinational technology company with a strong presence in e-commerce and cloud computing. Alibaba Group Holding’s (NYSE:BABA) cloud revenue grew 34% year-over-year, and its AI-related products recorded nine consecutive quarters of triple-digit revenue growth. At the end of Q4 2025, Alibaba Group Holding (NYSE:BABA) traded at roughly $146 per share, with $41 billion in net cash and generating nearly $35 billion in quarterly revenue from its core businesses. The fund reduced its exposure by approximately 10% at $172 per share after an 85% run-up in price. Alibaba Group Holding’s (NYSE:BABA) valuation stands at 18x trailing earnings, providing a balance of growth potential through AI and cloud while being protected by established businesses. The one-month return of Alibaba Group Holding Ltd. (NYSE:BABA) was approximately -3.57%, and its shares gained about 86.43% of their value over the last 52 weeks. On January 9, 2026, Alibaba Group Holding Limited (NYSE:BABA) stock closed at approximately $150.96 per share, with a market capitalization of about $358.95 billion.
JB Global Capital stated the following regarding Alibaba Group Holding (NYSE:BABA) in its fourth quarter 2025 investor letter:
“We made the decision to decrease our exposure to Alibaba Group Holding (NYSE:BABA) stock after a nearly 85% run-up in price. We trimmed the position by roughly 10% at $172 per share, a level at which we felt comfortable reallocating profits into other opportunities. Our decision relates more to the changing risk/reward profile than a loss of conviction in business value.
Since reaching a high of ~$190 per share, Alibaba’s stock has fallen subsequently to $146 per share by the end of Q4.
Does this change our thesis? No. The 25% drawdown was triggered by political headlines (sentiment vs. fundamentals) and margin pressure from quick commerce investments. In mid-November, the Financial Times reported on a White House memo alleging Alibaba provided “tech support for Chinese military operations against targets in the U.S.”—claims Alibaba immediately rejected as “completely false.” Shortly after, the Pentagon recommended adding Alibaba to its Section 1260H list of Chinese companies deemed military-linked, with Deputy Defense Secretary Stephen Feinberg informing Congress in an October letter that Alibaba “should be added” to the roster. The narrative shifted from “AI cloud growth story” to “uninvestable political risk” within weeks. These headlines arrived just as Alibaba was aggressively investing into quick commerce infrastructure, while adjusted profit fell 18% year-over-year as fierce competition in China compressed margins.
Throughout 2026, we’re monitoring three key metrics:
1. Cloud revenue growth sustaining above 30%.
2. AI product monetization improving.
3. E-commerce margins stabilizing as the competitive environment in quick commerce reaches equilibrium.”
Christopher Penler / Shutterstock.com
Alibaba Group Holding (NYSE:BABA) is in the 17th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 115 hedge fund portfolios held Alibaba Group Holding (NYSE:BABA) at the end of the third quarter, which was 91 in the previous quarter. While we acknowledge the risk and potential of Alibaba Group Holding (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 (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 (NYSE:BABA) and shared the list of AI stocks gaining attention on Wall Street. In addition, please check out our hedge fund investor letters Q4 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.
