Michael Burry, the famed ‘Big Short’ investor, earned the admiration of investors all over the world by predicting and profiting off the 2008 subprime mortgage crisis.
Since then, he has remained active through his hedge fund, Scion Asset Management. While his earlier calls in recent years, such as the ill-timed short on semiconductors and a bearish stance on the S&P 500, missed the mark, Burry’s pivot to China appears to be paying off in 2025.
Rather than building a major long position in the U.S. market, he allocated nearly half of Scion Asset Management’s portfolio to Chinese technology companies.
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According to the latest 13F filings, while Burry has gradually reduced his exposure to Chinese stocks, his holdings remain substantial and Alibaba (NYSE: BABA) continues to be the top-performing asset in the fund.
By press time on March 24, Alibaba’s share price climbed to $135.14, marking a remarkable 61.52% year-to-date gain on the New York Stock Exchange and a 63.35% rally on the Hong Kong exchange.
Alibaba’s AI and e-commerce growth drive gains
Alibaba’s stock rally has been driven by solid fundamentals. In its latest Q4 2024 earnings report, the company posted a double beat, outperforming analyst expectations on both revenue and profits.
Revenue from its Cloud Intelligence Group climbed 13% during the quarter, fueled by sustained triple-digit growth in AI-related product sales for the sixth consecutive quarter.
The company’s e-commerce platforms, Taobao and Tmall, also reported a 9% increase in customer management revenue.
Notably, Alibaba’s growth extends beyond its domestic operations. Its international commerce division which includes AliExpress and Trendyol delivered a 32% year-over-year increase in revenue last quarter.
Investor interest in Alibaba’s technology efforts has intensified after the company announced a partnership with Apple (NASDAQ: AAPL) to bring AI features to iPhones sold in China.
The move comes as Chinese tech innovation gains global attention, particularly after local startup DeepSeek launched a new AI model in January, claiming it to be more efficient and cost-effective than leading U.S. counterparts.
In the aftermath of DeepSeek’s success, Alibaba announced Qwen 2.5 version of its own AI model, which it claims outperforms DeepSeek’s model in both efficiency and performance.
Burry’s big win: Alibaba stock position swells over $7 million
For investors, the payoff is clear—a $1,000 investment in BABA stock at the start of 2025 would now be worth approximately $1,615, translating to a $615 profit in less than three months.
As for Burry, his bet on Alibaba has paid off on an even larger scale. His stake stood at 150,000 shares valued at $12.7 million as of December 31, 2024, when Alibaba traded at $84.74 per share.
With the stock climbing to $135.14 by March 24, Burry’s position has swelled to around $20.3 million, an impressive unrealized gain of roughly $7.6 million in just under three months.
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