Does Alibaba Group Holdings Ltd (BABA) offer attractive risk/return opportunities?

Patient capital managementthe value investment company has released its 2025 investor letter for the first quarter of the “Patient Capital Obacity Equity Strategy.” A copy of a letter can do so I downloaded it from here. 2025 started off a solid start in mid-February when the market hit its all-time high. However, a dramatic reversal led to the S&P 500 falling 8.7% and 4.3% quarter down. Over the quarter, the strategy returned a fee of -9.5% compared to the -4.3% return on the S&P 500. According to the three-factor performance attribution model, assignment and interaction effects positively contributed to portfolio performance partially offset by selection effects. Plus, check out our top 5 holdings funds to find out the best picks of 2025.

In a 2025 investor letter in the first quarter, the Patient Capital Opportunity Equity Strategy highlighted stocks such as Alibaba Group Holding Limited (NYSE:Baba). Alibaba Group Holding Limited (NYSE: BABA) offers technology infrastructure and marketing reach. Alibaba Group Holding Limited (NYSE: BABA)’s one-month return was -12.28%, with its shares earning 58.39% of its value over the past 52 weeks. On April 23, 2025, Alibaba Group Holding Limited (NYSE:BABA) shares closed at $118.97 per share, earning a market capitalization of $28.547.4 billion.

In its first quarter 2025 investor letter, the Patient Capital Chance Equity Strategy stated the following about Alibaba Group Holding Limited (NYSE: BABA).

“Alibaba Group Holding Limited (NYSE: BABA) Following the launch of Deepseek’s surprising AI product in early January, the market was caught off guard in the first quarter after a strong rebound. This development has raised expectations of improving competitiveness in the market. Alibaba has long been grateful for it as it has continued to trade with significant discounts on some of its valuations. While most investors abolished Chinese companies, there was an opportunity to invest in high quality businesses at lock bottom prices as China’s odds ratings are increasing. During this period, the company launched both a dividend (yield of 1.0%) and a buyback program, repurchasing 7% of the shares issued over the past 12 months. Unfortunately, much of the profit achieved in the first quarter has been reversed following an escalation of tariff tensions between the US and China. The ultimate impact of tariffs remains uncertain, but Alibaba is limiting exposure to international markets, which currently only earn 12% of revenues from outside China. While tariff wars can significantly damage economic activity and create negative feedback loops to domestic demand, Alibaba considers it to be one of the more insulated Chinese companies in this environment. ”