Long-Term Stock Portfolio: Best Stocks for 10 Years

5. Alibaba Group Holding Ltd. (NYSE:BABA)

10-Year Revenue CAGR: 31.26%

Number of Hedge Fund Holders: 115

Alibaba Group Holding Ltd. (NYSE:BABA) is a leading technology company that operates a diverse portfolio of businesses, including e-commerce platforms, cloud computing services, digital media, and entertainment. It plays a significant role in the Chinese economy and impacts businesses and consumers worldwide.

In FQ2 2025, the company demonstrated continued growth, with revenue increasing by 7% year-over-year, driven by a double-digit expansion in public cloud revenue, a key segment within its Cloud Intelligence Group. The Cloud Intelligence Group, which focuses on cloud computing and AI services, generated RMB 29.6 billion ($4.2 billion) in revenue during FQ2 2025. Notably, AI-related products within this segment achieved triple-digit year-over-year growth for the 5th consecutive quarter.

Recognizing the immense potential of AI, Alibaba Group Holding Ltd. (NYSE:BABA) plans to significantly invest in AI infrastructure to further solidify its position as a leading provider of AI-powered cloud solutions.

In its Q3 2024 investor letter, Conventum – Alluvium Global Fund highlighted the significant outperformance of Alibaba Group Holding Ltd. (NYSE:BABA) driven by China’s recent stimulus package, while acknowledging the potential risks associated with its current valuation. Here’s what it stated:

“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.”