Where is Mahdi (AS) right now? Is he in cave?
Imam Mahdi disappeared in 260/874 when he became Imam. The last time that he was seen, was in the cellar of his father's house in Samarra, Iraq. That is what is rumored regarding Shia that they believe Mahdi is in the cave!!!
Shia do NOT believe that Imam Mahdi is in the Cave or Cellar! He was just seen there for the last time. He can be anywhere Allah wishes. However one thing is clear is that he lives on the earth among people while people around him do not perceive.
Second, with regards to the occultation of al-Mahdi (AS), the Quran does NOT rule out such an occurrence at all. Again, the examples of Jesus (AS) and al-Khidr (AS), who are both in occultation, are worthy of mentioning.
Source: AL-SHIA.ORG