I Was Wrong On Alibaba, Stimulus Could Fuel More Gains (Rating Upgrade)

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Millennial Dividends
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(16min)

Summary

  • Alibaba faces challenges such as market share loss, increased competition, and regulatory scrutiny, but recent Chinese stimulus measures have boosted its stock by over 20%.
  • Despite deteriorating fundamentals, Alibaba's e-commerce and cloud segments show potential for recovery, driven by the stimulus package and improved consumer sentiment.
  • Alibaba's valuation remains attractive, with a share-repurchase program and potential for 28-30% annual returns, but political risks in China warrant a cautious "Hold" rating.
  • I underestimated the impact of China's economic stimulus, prompting an upgrade from "Sell" to "Hold," while favoring investments in EU/US companies with Chinese market exposure.

maybefalse

It's been a volatile last 5 years for Alibaba Group Holding Limited (NYSE:BABA), casting doubt on the future of the Chinese tech juggernaut amidst the weaker-than-expected domestic economy, loss of market share in e-commerce, increased competition in cloud

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About BABA Stock

SymbolLast Price% Chg
BABA
110.140.79%
Post110.900.69%
Created with Highcharts 11.2.0Oct 7Oc…Oct 8Oct 9Oct 10Oct 11100110120
Market Cap
$256.35B
PE (FWD)
12.43
Yield
1.82%
Rev Growth (YoY)
5.90%
Short Interest
2.69%
Prev. Close
$109.28
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