BABA posts its seventh straight quarter of triple-digit AI revenue growth, but faces pricing pressure and fierce cloud competition.
Chinese tech giant Alibaba has updated its open-source video-generating artificial intelligence (AI) model. That's according to a report Tuesday (Aug. 26) by Bloomberg News, which describes this move as part of the company's rapid pace of AI upgrades to keep up with its American and Chinese competition.
Alibaba Group Holding Limited is deeply undervalued, trading at 14x forward earnings despite aggressive $53B AI investment and strong cloud/AI growth. The market ignores Alibaba's successful pivot from e-commerce to AI/cloud, giving little value to its rapidly expanding tech segments. Sum-of-the-parts analysis shows Alibaba's core commerce alone justifies most of its market cap, with cloud and international businesses essentially free.
Avoid Alibaba stock ahead of the fiscal first-quarter results. PDD's dominance, China's deflation, and premium valuations amid deteriorating fundamentals make this a clear sell.
Most investors have been afraid of putting their money to work overseas, particularly in the Chinese stock market. While there are many reasons to be careful when investing in other countries, some of these reasons often place sentiment into an overly conservative corner, and that often leads to several missed opportunities.
Alibaba (BABA) closed the most recent trading day at $124.36, moving +1.16% from the previous trading session.
I maintain a Buy rating on Alibaba Group Holding Limited stock ahead of Q1 '26 earnings. My bullish stance is driven by strong AI and cloud growth as key long-term tailwinds. Alibaba's aggressive $53B AI/cloud investment and resilient e-commerce trends position it for margin surprises despite modest topline growth. BABA stock valuation remains attractive, with discounted forward multiples, above-average growth, and sector-leading profitability supporting further upside.
HP, Chewy, Alibaba, Best Buy, Dollar General, and more also will report earnings. On the economic front, we'll see inflation numbers from several sources and a housing data release.
Chinese stocks have been climbing since early this year, when DeepSeek's simpler, cheaper AI models reinvigorated interest in China's technology companies.
Bullish sentiments have finally returned to Alibaba stock, as Chinese equities have continued to mount a solid recovery from the doldrums. Alibaba's burgeoning AI capabilities and Alicloud's profitability growth underpin its bullish thesis. While it has contended with substantive challenges in its broader e-commerce business, Alibaba still yields substantial financial might against its peers.
BABA's Banma spin-off aims to cut cash drain, boost capital efficiency and refocus investments on core growth drivers.
Alibaba's AI bet is backfiring as margins collapse and ByteDance steals market share. With competition intensifying, BABA looks like a value trap.