Michael Burry's biggest stock holding is on fire — and Wall Street is taking notice

Core Viewpoint - Michael Burry has shifted his investment focus from U.S. equities to the undervalued Chinese market, particularly Alibaba, which has shown significant growth in 2024 [1][2]. Group 1: Investment Strategy - Burry's hedge fund, Scion Asset Management, has a concentrated portfolio with Alibaba as its largest holding, making up 16% of the portfolio [2]. - The S&P 500 has decreased by approximately 4.37% since the beginning of the year, while Chinese indices have performed positively [2]. Group 2: Alibaba's Performance - As of April 1, Alibaba's stock was trading at $132.23, reflecting a year-to-date increase of 55.95% [3]. - Analysts have begun to revise their price targets for Alibaba following a strong Q3 2024 earnings call, indicating a more optimistic outlook [4][5]. Group 3: Analyst Upgrades - Bernstein's Robin Zhu upgraded Alibaba's stock rating from 'Hold' to 'Buy' and raised the price target from $104 to $165 after the earnings call [7]. - Mizuho analyst James Lee increased his price target from $140 to $170, citing steady capital inflows and the launch of a new AI model [9]. Group 4: Valuation Metrics - Despite the stock's impressive rise, Alibaba is trading at a forward price-to-earnings ratio of 13.41, which is considered modest [10]. - To return to its all-time high of $306.16, Alibaba's stock would need to increase by 131.53% [10].