Alibaba: Don't Worry About Margins
Summary
- Alibaba remains an attractive large-cap Chinese stock, despite a recent earnings miss due to strategic growth investments in Quick Commerce, Cloud, and AI.
- BABA's Cloud segment, driven by the Qwen gen-AI model, is experiencing rapid growth and is positioned to benefit from China's expanding AI market.
- BABA also saw a significant revenue acceleration in Quick Commerce, which is where the company is building out its instant delivery businesses.
- Shares of BABA offer potential upside for investors willing to accept China-specific risks and regulatory challenges.
- I see a fair value of $188 per share, based off a reasonable forward P/E ratio of 20X, emphasizing its strong Cloud momentum and undervaluation on an earnings basis.
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About BABA Stock
| Symbol | Last Price | % Chg |
|---|---|---|
| 155.96 | -1.37% | |
| Post | 155.68 | -0.18% |
Chart
Chart with 160 data points.
The chart has 1 X axis displaying Time. Data ranges from 2025-12-04 09:30:00 to 2025-12-09 16:00:00.
The chart has 1 Y axis displaying values. Data ranges from 154.73 to 159.14.
End of interactive chart.
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