Ever since the abandoning of the 2023 bet against the semiconductor industry, Michael Burry’s massive investment in a set of Chinese stocks has been his most controversial move, though it, by February 2025, also proved highly lucrative.
The Big Short investor’s largest position, the technology and e-commerce giant Alibaba (NYSE: BABA), has been a prime example of this fact.
For more than a year, Burry has been building up a massive BABA position despite the stock offering only lukewarm performance until late January, when it suddenly exploded and reached its press time price of $131.74.
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Burry would make tens of millions if BABA stock reclaims ATH
The rally even led to the legendary short trader’s stake rocketing from its December 31, 2024, value of $12.7 million to approximately $22 million on February 21, as Finbold reported on the day.
Despite the soaring — and despite the more recent correction — both Alibaba shares’ historical performance and the staggering success of some of the other players in the ongoing artificial intelligence (AI) boom demonstrate the equity could go even higher.
Indeed, should BABA stock reclaim its old all-time high (ATH) of $306.16, it would mean that it had rallied 132.39% from the press time price. Simultaneously, if Burry maintains his position as it was in the latest available filing, he would enjoy a $27.5 million profit as it would climb to a total of $46 million.
Why BABA shares could soar past their old ATH
Considering that Alibaba’s current surge is primarily linked to the release of the Qwen 2.5 AI model in the immediate aftermath of the bloodbath caused by DeepSeek, a rally back to ATH does not appear out of reach.
For example, Nvidia (NASDAQ: NVDA) — widely seen as the proverbial ‘shovel seller’ of the technological gold rush — enjoyed a 652.73% surge since the original public release of ChatGPT in late 2022.
Multiple other stocks involved with AI have also experienced major upturns, with Palantir (NASDAQ: PLTR) with its six-month rally of 183.34% and Super Micro Computer (NASDAQ: SMCI) with its November 2022 to March 2024 1,214.88% rise being other prime examples.
Why BABA stock might not reclaim its old ATH
Still, the eventual downfall of Supermicro and the apparent failure to take off on the part of other prime candidates such as Advanced Micro Devices (NASDAQ: AMD) and Intel (NASDAQ: INTC) demonstrate that BABA stock’s success is far from guaranteed.
Furthermore, the Taiwan Semiconductor Manufacturing Industry’s (NYSE: TSM) modest 45.41% rise in the last 12 months — modest considering TSMC’s importance in the industry — demonstrates that public perception and visibility play a major role in stock market success.
Such a situation could prove particularly impactful for Alibaba as the Chinese market and products suffer from a combination of poor understanding and mistrust when it comes to Western investors, as well as from the fact that the People’s Republic does not prioritize the line going up in the same way many other countries do.
Beyond just the perception, Chinese technological advancements have also been impacted by American export restrictions affecting highly advanced components. The already existing limitations, already described as more harmful than anything under the Biden administration, are now set to become even more punishing.
Still, models such as Qwen 2.5 and DeepSeek have proven that companies in the People’s Republic retain the capacity to make breakthroughs even with limited access to cutting-edge equipment, meaning that Alibaba may yet make major breakthroughs that could set BABA shares on the road to new all-time highs.
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