A New York fund manager says the Chinese stock Alibaba (BABA) has quietly become one of the market’s purest AI trades.
In a new interview on the Schwab Network, Thomas Hayes, chairman of Great Hill Capital, says his firm heavily accumulated BABA when it dropped below $70 in 2022.
According to Hayes, the firm’s conviction in Alibaba has paid off, and he believes the stock is not yet done surging amid the AI trade.
He highlights that Alibaba is now positioned as both a dominant e-commerce giant and one of the world’s most undervalued AI platforms.
“Look, we started buying this over $100. It dropped to $60. We pounded the table: buy, buy, buy, while all the sell sides were saying, China is uninvestable, and all we saw was $25 billion of free cash flow, $80 billion on the balance sheet, number one China middle class e-commerce retailer, number one in cloud, and the cheapest way to play AI in the world.
We brought our cost basis down to $82. It’s a $175 stock right now… It’s going a lot higher. It’s going a lot higher.”
Hayes believes that the bull case for Alibaba is just starting to unfold.
“This story hasn’t even begun. They just launched Qwen 3.0 Max, which is the large language model with one trillion parameters. I’m telling you, Alibaba is the cheapest way to play AI in the entire world.”
Last week, Alibaba announced the release of a trillion-parameter large language model – the Qwen3-Max. The firm also teamed up with Nvidia to develop “physical AI” capabilities, spanning model training, data synthesis, environmental simulation, and validation testing. The company did not disclose whether Nvidia chips will power its upcoming data centers.
Great Hill Capital is a New York–based hedge fund led by Thomas Hayes, who serves as chairman and managing member. The firm manages about $631 million in assets and is best known for its value-oriented strategy, often focusing on overlooked or contrarian opportunities in global equities.
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