Slowing Growth in the Core Commerce Business Hurt Alibaba (BABA) in Q4

3 days ago 5

Soumya Eswaran

Thu, February 12, 2026 astatine 9:34 AM CST 4 min read

Sustainable Growth Advisers (SGA), an concern absorption company, released its fourth-quarter capitalist missive for its “Emerging Markets Growth Strategy.” A transcript of the missive tin beryllium downloaded here. The 4th fourth of 2025 marked beardown divergence from the market. Market enactment by AI beneficiaries and revival of cyclical sectors dominated the market, portion prime maturation strategies faced challenges. In Q4 2025, the portfolio returned 0.8% (Gross) and 0.6% (Net) compared to the MSCI EM Net TR Index instrumentality of 4.7% and the MSCI EM Growth Net TR Index instrumentality of 3.3%. In 2025, the portfolio delivered beardown returns of 23.8% (Gross) and 22.8% (Net) but lagged the 33.6% and 34.3% returns for the indexes, respectively. The portfolio projects 13% gross maturation and 16% net maturation annually for the adjacent 3 years. Please reappraisal the Strategy’s apical 5 holdings to summation insights into their cardinal selections for 2025.

In its fourth-quarter 2025 capitalist letter, SGA Emerging Markets Growth Strategy highlighted stocks similar Alibaba Group Holding Limited (NYSE:BABA). Alibaba Group Holding Limited (NYSE:BABA) is simply a Chinese exertion institution that provides integer infrastructure and selling reach. On February 11, 2026, Alibaba Group Holding Limited (NYSE:BABA) banal closed astatine $164.32 per share. One-month instrumentality of Alibaba Group Holding Limited (NYSE:BABA) was -3.87%, and its shares are up 37.46% implicit the past 12 months. Alibaba Group Holding Limited (NYSE:BABA) has a marketplace capitalization of $392.286 billion.

SGA Emerging Markets Growth Strategy stated the pursuing regarding Alibaba Group Holding Limited (NYSE:BABA) successful its 4th fourth 2025 capitalist letter:

"Alibaba Group Holding Limited (NYSE:BABA) was a detractor during the 4th aft the institution reported mixed fiscal Q2 results. While unreality gross maturation accelerated and margins remained stable, the halfway commerce concern struggled with slowing maturation and important nett pressure, peculiarly successful the speedy commerce conception wherever dense concern and aggravated contention led to a crisp diminution successful profitability. Management’s strategy to prioritize marketplace stock implicit portion economics successful speedy commerce volition effect successful higher bid measurement and idiosyncratic engagement with an expanding stock of gross merchandise worth expected to thrust amended ratio and portion economics improvement. The company’s quick-commerce conception has rapidly approached marketplace enactment successful regular nutrient delivery, leveraging its immense Taobao idiosyncratic basal and ecosystem assets specified arsenic Alipay and Amap, portion besides driving engagement and maturation crossed halfway commerce. Ongoing investments successful AI and unreality infrastructure are expected to summation successful coming quarters, and AI request is wide with galore accepted industries and enterprises ramping adoption portion unreality penetration successful China remains low. We besides expect ongoing investments successful speedy commerce and nutrient transportation services to prolong marketplace stock and idiosyncratic engagement, though astatine a little strength compared to the archetypal concern stage. We stay assured successful Alibaba’s quality to make high-teens net maturation implicit the adjacent 3 years fixed its scale, innovation, and beardown presumption successful China’s integer economy. We added to the presumption during the quarter, maintaining an above-average weight."