TLDR
- Philippe Laffont’s Coatue Management sold 307,780 Tesla shares (15% of position) in Q3 2025
- Coatue purchased 1,128,826 Alibaba shares, increasing holdings by 130% in the same quarter
- Tesla’s Q3 pre-tax income was 40% dependent on regulatory credits and interest income
- Alibaba Cloud revenue jumped 26% to $4.66 billion with AI products showing triple-digit growth
- Alibaba stock trades at 16 times forward earnings, below most AI-focused technology stocks
Philippe Laffont, managing nearly $41 billion at Coatue Management, executed major portfolio shifts during the third quarter of 2025. The billionaire investor sold Tesla shares while substantially increasing his position in Chinese e-commerce and cloud computing giant Alibaba.
Alibaba Group Holding Limited, BABA
Form 13F filings with the Securities and Exchange Commission revealed Laffont sold 307,780 Tesla shares in Q3. This represents a 15% reduction in Coatue’s electric vehicle holdings. The move continues a pattern that began in early 2023 when the fund held peak Tesla positions.
Since March 2023, Coatue has unloaded over 3.12 million Tesla shares total. This marks a 64% decline from the fund’s maximum position. Despite the selling, Tesla stock has risen nearly tenfold since Laffont’s initial purchase in early 2020.
Tesla Faces Mounting Challenges
Tesla delivered around 1.8 million vehicles in each of the past two years. The company has implemented more than six price cuts over the last 30 months. CEO Elon Musk linked these pricing decisions directly to consumer demand levels during the 2023 shareholder meeting.
Price reductions have compressed Tesla’s vehicle profit margins. Industry analysts view this as evidence of growing competition in the electric vehicle sector. The company’s third quarter financials revealed that 40% of pre-tax income originated from automotive regulatory credits and net interest income.
These income sources are viewed as non-sustainable by financial experts. Some quarters have seen these categories account for over half of total pre-tax earnings. The reliance on non-core revenue streams raises questions about underlying business performance.
Musk’s track record on predictions also draws scrutiny. The CEO has claimed for 11 consecutive years that Level 5 autonomous driving was just one year away. His 2020 prediction of one million robotaxis on roads never materialized.
Alibaba Position Grows Substantially
Laffont purchased 1,128,826 Alibaba shares during Q3 2025. This transaction increased Coatue’s stake by 130% compared to mid-year holdings. The buying activity signals strong conviction in the Chinese technology company’s prospects.
Alibaba controls 44% of China’s online retail market through its Taobao and Tmall platforms. International Trade Administration data shows this market share is 20 percentage points higher than nearest competitor JD.com. The company benefits from China’s expanding middle class driving e-commerce growth.
Cloud Computing Powers Revenue Growth
Alibaba’s Cloud Intelligence Group generated $4.66 billion in revenue during the June quarter. This represents 26% year-over-year growth. The company reported AI-related product revenue has maintained triple-digit growth for eight straight quarters.
Alibaba Cloud integrates generative AI and large language models into its service platform. These capabilities help business customers improve operations while driving Alibaba’s cash flow expansion. The cloud division represents the company’s fastest-growing revenue segment.
The stock currently trades at approximately 16 times forward earnings. This valuation sits below comparable AI-focused technology stocks including the Magnificent Seven group. The pricing multiple also excludes Alibaba’s substantial net cash position from consideration.
Alibaba will report fiscal Q2 2026 results on November 25. Analysts forecast earnings of $0.85 per share on revenue of $34.29 billion, representing 4% year-over-year revenue growth.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
