We recently published a list of Michael Burry’s Top Holdings Were Gaining While NVDA Was Crashing. In this article, we are going to take a look at where Alibaba Group Holding Limited (NYSE: BABA) stands against other Michael Burry’s top Holdings that were gaining while NVDA was crashing.
Michael Burry’s name is synonymous with contrarian investing strategies, being one of the few investors who bet against the housing market and profiting from the subprime mortgage crisis between 2007 and 2010. His stance on the real estate market in 2008 made the American investor and hedge fund manager famous enough to make it in the 2015 film “The Big Short,” where he was portrayed by Christian Bale.
Over the years, Burry, who established a renowned and well-regarded California-based hedge fund Scion Asset Management, LLC in 2013, often made headlines for his recession warnings and market crash “predictions”. However, with warnings about economic downturns fizzling out, Burry’s reputation as both an expert and hedge fund manager was often at stake.
But even though some of his recession warnings have not played out as predicted, Burry remains one of the market geniuses whose moves investors value and follow as explained in our recent survey of Michael Burry’s portfolio in 2024.
His firm has achieved a return of over 160% over the past decade, outperforming the S&P 500 during that time, according to Ticker Nerd.
Scion Asset Management manages hedge funds with discretionary assets under management of $196,206,549 (as of March 2024). In its fourth quarter SEC 13F filing on February 14, Burry’s firm disclosed a total of 13 security holdings with a portfolio value of $77,435,131 and a top 10 holdings concentration of 93.62%.
Burry wrapped up 2024 being cautiously optimistic regarding long-term prospects in terms of China’s online retail market, given ongoing regulatory and macroeconomic uncertainties in the Asian country. In the quarter ending December 31, he cut the stake in two of his top three investments in Chinese technology before the January release of DeepSeek’s latest AI models which turned tech space on its head starting a massive rally in the country’s stock market. Apart from that, it appears Burry is looking to capitalize on the growing demand for healthcare services and advanced analytical technologies, while also focusing on consumer discretionary taking positions in apparel, cosmetics, and luxury goods industries.
Our Methodology
To make the list of Michael Burry’s top portfolio holdings we reviewed Scion Asset Management’s fourth-quarter 2024 portfolio and ranked the list according to the hedge fund’s stake value in each firm. If there was an overlap, we prioritized the holding that was worth more money. We have also assessed the number of shares acquired by Scion Asset and hedge fund sentiment toward each stock from Insider Monkey’s database of hedge investor letters.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Alibaba Group Holding Limited (BABA): Among Michael Burry’s Top Holdings Were Gaining While NVDA Was Crashing
An e-commerce platform displaying a wide range of products to customers online.
Alibaba Group Holding Limited (NYSE:BABA)
Portion of portfolio: 16.42%
Value of holdings: $12,718,500
Alibaba Group Holding Limited (NYSE: BABA) is a multinational technology company providing online and mobile marketplaces in retail and wholesale trade.
The company’s platforms, such as Taobao and Tmall, serve millions of customers daily, while Alibaba.com and AliExpress boast a presence in more than 190 countries and regions. Alibaba Cloud, Alibaba’s cloud computing division, is one of the largest in the world, providing scalable IT solutions to businesses. Over the next three years, it plans to invest $53 billion into cloud computing and artificial intelligence. The company also has interests in digital media, logistics and fintech.
Burry reduced its stake in the Chinese tech giant sequentially by 25% between the third and fourth quarters to 150,000 shares, according to a quarterly filing with the Securities and Exchange Commission Scion Asset. However, year-over-year, the ‘Big Short’ investor doubled down interest in Alibaba (NYSE: BABA) from 75,000 in the fourth quarter of 2023.
The Chinese titan, which has a market capitalization of roughly $330.238 billion, reported fourth-quarter fiscal 2024 results with revenue reaching RMB280.2 billion (US$38.6 billion), up 8% year-over-year. Customer management revenue at Taobao and Tmall Group increased by 9% to RMB100.8 billion over the same period. Cloud revenue increased 13% to RMB31.7 billion, driven by AI-related products. Net income increased 333% to RMB46.4 billion.
Alibaba (NYSE: BABA) made headlines in 2023 venturing into AI with the launch of its own ChatGPT-style product Tongyi Qianwen. A new version of the company’s Qwen 2.5 artificial intelligence model was released in January on the heels of a meteoric rise of Chinese AI startup DeepSeek, according to Reuters.
Alibaba shares traded at $139.02 after the market close on March 11. While Alibaba stock lost over 54% of its value from a late 2020 peak, year-to-date the share price gained over 65% year-to-date.
Overall, BABA ranks 1st on our list of Michael Burry’s top Holdings that were gaining while NVDA was crashing. While we acknowledge the potential of 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 BABA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
