NEW YORK – Despite a recent price target adjustment from one analyst, Alibaba Group Holding Limited (NYSE: BABA) is being championed by prominent hedge funds as a significantly undervalued long-term investment, driven by a strategic pivot to artificial intelligence, renewed e-commerce momentum, and robust shareholder returns.
While Mizuho analyst Wei Fang recently trimmed the price objective for Alibaba to $149 from $160, citing growing competitive pressures on profit margins in China’s local commerce sector, the firm maintained its “Outperform” rating. This move signals underlying confidence in the tech giant’s long-term strategy and fundamental strength. The analyst noted that robust consumer demand, fueled by promotional events in the June quarter, continues to be a bright spot for the company.
This optimism is rooted in Alibaba’s strategic focus. The company’s user-first, AI-driven approach is delivering healthy results across its core businesses. Alibaba has sharpened its growth portfolio to concentrate on three key areas: AI + Cloud, e-commerce, and its other internet platform businesses, positioning itself to capitalize on what it calls the “historic opportunity” presented by artificial intelligence through heavy investments in infrastructure and technology.
This bullish sentiment is strongly echoed by value investing firm Patient Capital Management. In its recent Q2 2025 investor letter, the fund highlighted Alibaba as an “attractive setup” with a clear path to a broader turnaround. The firm pointed to several key tailwinds, stating, “Alibaba is benefiting from accelerating AI initiatives, renewed momentum in its Tmall platform, and rapid growth in instant shopping and local services.”
Patient Capital Management emphasized the compelling valuation of the company. “Despite these tailwinds, the company trades at just 11.2x earnings, well below historical averages,” the fund noted. It also praised Alibaba’s commitment to shareholder value through its 1% dividend yield and a robust share buyback program.
The firm concluded with a strong vote of confidence, stating, “We believe Alibaba remains significantly undervalued relative to its sum-of-the-parts, and see meaningful upside as fundamentals stabilize and sentiment improves.”
In summary, while facing acknowledged competitive challenges, the consensus from key investment funds points to Alibaba’s strong fundamental position and significant long-term growth potential, making it a noteworthy stock for investors focused on value and technology.
