Alibaba Jumps Post Q3 Earnings: ETFs to Buy

Alibaba Group BABA spread cheer among investors following its third-quarter fiscal 2025 results. The Chinese e-commerce giant recorded its fastest pace of revenue growth in more than a year. Though it missed estimates on the earnings front, revenues came ahead of expectations. 

Shares of BABA jumped to a three-year high following the results and closed 8.1% higher yesterday. Investors seeking to tap the growth should invest in ETFs with the largest allocation to this Chinese e-commerce giant. These include Roundhill China Dragons ETF DRAG, Invesco Golden Dragon China ETF PGJ, CoreValues Alpha Greater China Growth ETF CGRO, ProShares Online Retail ETF ONLN and The Nightview Fund NITE. 

Earnings of $2.93 per ADS missed the Zacks Consensus Estimate of $3.08 but were higher than the year-ago earnings of $2.67. Revenues grew 7.6% year over year to $38.5 billion and edged past the consensus mark of $38.2 billion. The revenue growth marks the fastest pace since the September quarter of 2023 (see: all the Technology ETFs here). 

AI-driven strategies have reaccelerated growth in Alibaba’s core businesses. AI-related product revenues achieved triple-digit growth for the sixth consecutive quarter. The solid trend is likely to continue in the coming quarters. Alibaba is "aggressively investing in AI infrastructure" over the next three years, according to a FactSet transcript. On the conference call, it said it expects its international e-commerce unit to turn profitable next fiscal year and looks to invest more in Cloud and AI over the next three years than in the past decade.

Alibaba stock has soared nearly 60% since the start of the year, driven by optimism surrounding future demand for its AI cloud products after Chinese firm DeepSeek unveiled a new AI model. Reports also suggest that Alibaba is exploring a direct investment in DeepSeek. The recent reports also reveal that the company will partner with Apple AAPL to provide AI features for iPhones in China (read: DeepSeek Buzz Boosts China Tech ETFs).

ETFs in Focus

Roundhill China Dragons ETF (DRAG)

Roundhill China Dragons ETF is the first-ever ETF to provide precise exposure to China’s tech leaders. It offers equal-weight exposure to a concentrated basket of the largest and most innovative Chinese companies (the “China Dragons”). DRAG currently holds nine stocks in its basket, with Alibaba occupying the top spot at 14%.

Roundhill China Dragons ETF has AUM of $37.4 million and charges 59 bps in annual fees. It trades in an average daily volume of 41,000 shares.

Invesco Golden Dragon China ETF (PGJ)

Invesco Golden Dragon China ETF follows the NASDAQ Golden Dragon China Index, which offers exposure to companies deriving the majority of their revenues from the People’s Republic of China. It holds a basket of 65 stocks, with Alibaba occupying the top position at 10% of assets. Consumer discretionary and communication services sectors take the largest share at 54% and 21%, respectively (read: What's Behind the Surge in Chinese Tech Stocks & ETFs?). 

Invesco Golden Dragon China ETF has AUM of $155.2 million and charges 67 bps in annual fees. It trades in an average daily volume of 62,000 shares and has a Zacks ETF Rank #3 (Hold) with a High risk outlook.

CoreValues Alpha Greater China Growth ETF (CGRO)

CoreValues Alpha Greater China Growth ETF is an actively managed fund that seeks to capitalize on Greater China's growth potential by investing primarily in equity securities of companies positioned in high-growth industries. It holds 30 stocks in its basket, with Alibaba occupying the third position at 7.90%.

CoreValues Alpha Greater China Growth ETF has amassed $8.6 million in its asset base and trades in an average daily volume of under 1,000 shares. It charges 85 bps in annual fees.

ProShares Online Retail ETF (ONLN)

ProShares Online Retail ETF offers exposure to companies deemed to be "Online Retailers." It tracks the ProShares Online Retail Index, holding 19 stocks in its basket. Alibaba is the fourth firm, accounting for 6.4% of the portfolio. 

ProShares Online Retail ETF has amassed $80.1 million in its asset base and currently trades in a moderate volume of around 18,000 shares a day, on average. It charges 58 bps in annual fees from investors. 

The Nightview Fund (NITE)

The Nightview Fund is an actively managed fund seeking long-term capital appreciation with the goal of outperforming the S&P 500 Total Return Index over a rolling 5-year period. It holds 20 stocks in its basket, with BABA occupying the fourth position at 6.1% of its assets (read:Airbnb Stock Surges Post Earnings: ETFs to Win).

The Nightview Fund charges 1.25% in annual fees and trades in an average daily volume of 5,000 shares. It has accumulated $27 million in its asset base since its launch in June 24 last year.

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