Investment management firm JB Global Capital released its fourth-quarter 2025 investor letter, titled “The Price of Conviction.” The letter underscores the firm’s concentrated investment strategy, prioritizing long-term conviction over short-term market fluctuations. During this quarter, global markets saw modest growth, although JB Global Capital experienced some drawdowns in its portfolio, reflecting its high-conviction approach.
For the full year, JB Global Capital reported remarkable cumulative returns of 108.9% since its inception, significantly outperforming key benchmarks including the S&P 500 and the VT World Index. The fund’s disciplined valuation methodology and commitment to identifying asymmetric risk/reward opportunities are central to its investment philosophy.
Alibaba’s Performance and Strategic Adjustments
In its investor letter, JB Global Capital highlighted the performance of Alibaba Group Holding (NYSE:BABA), a prominent Chinese multinational in e-commerce and cloud computing. Notably, Alibaba’s cloud revenue increased by 34% year-over-year, while its AI-driven products marked nine consecutive quarters of triple-digit revenue growth. As of the end of Q4 2025, Alibaba shares traded at approximately $146 each, supported by $41 billion in net cash and nearly $35 billion in quarterly revenue from its core operations.
Despite this positive outlook, JB Global Capital reduced its exposure to Alibaba by roughly 10% at $172 per share following an 85% price surge. The firm’s decision was not based on a loss of confidence in Alibaba’s business value but rather a reassessment of the changing risk/reward dynamics.
The stock peaked at around $190 per share before a decline to $146 by the end of Q4. This decrease was largely influenced by political headlines and increased margin pressures from Alibaba’s aggressive investments in quick commerce. In mid-November, the Financial Times reported allegations that Alibaba provided “tech support for Chinese military operations against targets in the U.S.,” which the company categorically denied as “completely false.” Subsequently, the Pentagon recommended adding Alibaba to its Section 1260H list of Chinese companies linked to military activities, further complicating the narrative surrounding the company.
Future Outlook and Monitoring Metrics
Looking ahead into 2026, JB Global Capital plans to closely monitor three critical metrics regarding Alibaba’s performance: sustaining cloud revenue growth above 30%, improving monetization of AI products, and stabilizing e-commerce margins as competitive pressures in quick commerce begin to balance out.
Despite acknowledging the risks associated with Alibaba as an investment, JB Global Capital’s conviction remains strong in identifying AI stocks with potentially higher returns over a shorter time frame. As of the third quarter, 115 hedge fund portfolios held shares of Alibaba, an increase from 91 in the previous quarter, indicating a growing interest among institutional investors.
JB Global Capital’s Q4 2025 investor letter presents a balanced analysis of Alibaba Group Holding, combining optimism about its growth prospects with a cautious approach to market volatility and geopolitical risks. The dynamic nature of the investment landscape demands constant vigilance, and the fund’s strategic adjustments reflect its commitment to navigating these challenges effectively.
