Ray Dalio’s Bridgewater Associates has made a bold move by significantly increasing its stake in Alibaba Group (BABA). According to the latest 13F filing, Bridgewater’s position in Alibaba grew by over 3,360% in the first quarter of 2025, rising from approximately $21.6 million at the end of 2024 to about $727 million by March 31, 2025. This dramatic shift has placed Alibaba among Bridgewater’s largest holdings and is a clear sign of Dalio’s confidence in the Chinese tech giant. 

The trade is particularly interesting given the ongoing U.S.-China trade war that’s left both U.S. and Chinese stocks experiencing a period of near-unprecedented volatility. Given President Donald Trump’s active stance against U.S. companies manufacturing in China, it’s a bold play by the legendary hedge fund. 

The Alibaba Bet: A Massive Move

Ray Dalio’s decision to increase his Alibaba stake by over 3,360% is unprecedented, even by the standards of a multibillion-dollar hedge fund. At the end of Q4 2024, Bridgewater’s Alibaba position was a relatively modest $21.6 million. However, by the close of Q1 2025, this had surged to nearly $727 million, reflecting a strong belief in Alibaba’s long-term growth potential.

This decision comes at a time when U.S.-China trade relations are incredibly volatile. 2025 has seen a relatively hostile diplomatic environment, creating opportunities for investors with wild swings in Chinese and U.S. companies alike. Alibaba, with its focus on artificial intelligence and international expansion, is well-positioned to capitalize on a trade deal, but could see a massive hit if tensions persist. This means it’s certainly a “high-risk, high-reward” play, with Bridgewater apparently expecting a trade deal to be reached soon. 

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Alibaba’s impressive performance has further validated Dalio's move. The company has reported strong earnings, with 7% year-over-year revenue growth, primarily driven by AI services. The “Amazon of China” is becoming a breakout leader in China’s AI race. Much like America’s Amazon, the company is the go-to for cloud computing services and is investing heavily in the area. This has resulted in 45% year-to-date share price growth as the company looks to recover some ground from its massive 2021 and 2022 slide. 

Michael Burry: Another Big Buyer

Interestingly, Ray Dalio is not the only major investor making a bold move on Alibaba. Michael Burry, the legendary investor known for his bet against the housing market before the 2008 financial crisis, has also been accumulating Alibaba shares.

As of December 31, 2024, Burry’s Scion Asset Management held 150,000 shares of Alibaba, which were purchased for approximately $12.7 million, or an average price of $96.55. Given the stock’s appreciation, this position is now worth about $18.6 million by May 2025. Burry’s contrarian investment approach aligns with his reputation for identifying value in overlooked or undervalued assets. However, Burry did cut this position by 25% from Q3 to Q4, implying he might be looking to reduce his exposure after sitting on respectable gains.

AI vs. Trade War

It’s unclear how this trend will ultimately shake out. On the one hand, Alibaba is a clear leader in the Chinese AI race. Investors looking to capture this momentum only have a few other potential U.S.-listed options, with Alibaba being one of the top choices. However, America’s ongoing protectionist policies could harm not only those AI efforts, but also Alibaba’s underlying businesses, resulting in long-term harm and muted gains.