Sometimes holding through the pain actually works out. Alibaba Group Holding Ltd (BABA) is up 80% year-to-date, and billionaire David Tepper is watching his long-suffering position transform into one of the quarter's most impressive wins.

Tepper's Appaloosa Management owns 6.45 million shares of Alibaba, bought at an average price of $81 per share. That's a cost basis of roughly $522 million. At today's prices, the stake is worth about $987 million. The math is straightforward: that's a gain north of $465 million, and it's happening because Alibaba finally figured out how to make AI stick.

Qwen Changes Everything

The catalyst here isn't subtle. Alibaba took its scattered AI efforts, consolidated them under a single brand called Qwen, and pushed it directly to consumers. The result? Ten million downloads in the first week. The app rocketed up China's App Store rankings, and analysts started throwing around comparisons to WeChat—which, if you're keeping score, is about the highest compliment you can give a Chinese app.

This wasn't just a product launch. It was a narrative reset. Investors had written off Alibaba as a fading e-commerce giant getting crushed by regulatory headwinds and competition. Now they're reassessing. Qwen's traction is coinciding with renewed momentum at Alibaba Cloud's AI division, creating a tighter story between product execution and stock performance. That combination is what's driving the rerating.

Jack Ma Is Back, and It Matters

Then there's the Jack Ma factor. The Alibaba co-founder quietly re-emerged in a hands-on role at Ant Group right as the company launched LingGuang, a new multimodal AI assistant. Ma's involvement has historically signaled strategic shifts, and the timing suggests this isn't coincidental. It looks like a coordinated effort across the Alibaba ecosystem to reclaim leadership in China's increasingly competitive AI landscape.

Tepper Didn't Hold Perfectly, But He Held

To be clear, Tepper wasn't a diamond-handed true believer. He trimmed his Alibaba position multiple times through 2024 and 2025. But he never bailed completely, and that decision is now anchoring one of the sharpest turnarounds in China tech.

For investors watching from the sidelines, the lesson is pretty direct: AI execution can completely rewrite the valuation story for legacy tech companies, and it can happen faster than anyone expects. Qwen's explosive start isn't just a product milestone—it's proof that when the fundamentals shift, the stock follows.