1. Alibaba Group Holding Limited (NYSE:BABA)
10-Year Revenue Growth Rate: 31.26%
Number of Hedge Fund Holders: 115
Alibaba Group Holding Limited (NYSE:BABA) is a major Chinese multinational company that focuses on various technology and e-commerce services. Its key business segments range from e-commerce platforms to logistics services, cloud computing, local consumer services, and more.
Lately, the company has been focused on user-focused strategy and advancements in artificial intelligence. Its focus on user engagement resulted in Taobao and Tmall witnessing a significant increase in monthly active users during the fiscal second quarter of 2025. This led to an increase in Gross Merchandise Value (GMV) on these platforms. Moreover, The number of 88VIP members, a loyalty program for high-spending customers, grew to 46 million, indicating strong customer retention and engagement. Alibaba Group Holding Limited (NYSE:BABA) generated RMB236,503 million (US$33,701 million) in revenue during the quarter, indicating an increase of 5% year-over-year.
Analysts expect the company to continue posting gains. Joyce Ju, analyst at Bank of America Securities raised the price target for BABA from $112 to $117, while keeping a Buy rating on the stock. The firm believes that the company will report 9% year-over-year during the fiscal third quarter of 2025, surpassing Street’s expectation by 2%. Alibaba Group Holding Limited (NYSE:BABA) ranks as the top high-growth international stock to invest in now.
Conventum – Alluvium Global Fund stated the following regarding Alibaba Group Holding Limited (NYSE:BABA) in its Q3 2024 investor letter:
“On 24 September the People’s Bank of China unveiled a massive three part stimulus package involving: (1) slashing the amount of cash banks need to hold in reserve and lowering the main policy interest rate; (2) cutting mortgage rates on existing home loans by 0.5% and reducing down payment requirements for second homes from 25% to 15%; and (3) supporting equity markets by a USD 114b lending pool to encourage companies to buy back shares and non-bank financial institutions to buy local equities (which may be expanded by the same amount two more times)5 . We are flabbergasted. But we shouldn’t be. After all, these types of arrangements have been all too common over the last 15 years. The local equity markets responded with gusto, and for the last week of the quarter the CSI 300 Index (Shanghai and Shenzen listed companies) was up 25.1%. Alibaba Group Holding Limited (NYSE:BABA) was not lost in all this, and returned 26.8% over that one week period. But Alibaba had already performed well so during the whole September quarter it was up a staggering 56.0%. As a result, Alibaba is no longer the cheap stock it once was. It now trades at a premium to our valuation – a valuation which admittedly had been progressively reduced over our holding period as a result of deteriorating business fundamentals. As a result of Alibaba’s significant outperformance, by the end of the quarter it had reached 3.7% of the Fund. We are weighing up our options here, considering the relative risk.”
While we acknowledge the potential of Alibaba Group Holding Limited (NYSE:BABA) to grow, our conviction lies in the belief that 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 BABA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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