Any investor who has been exposed to Chinese stocks has likely noticed a decline in sleep quality over the past few months. These names have become so volatile lately because of the same driving factor across the S&P 500 and the overall technology sector today.
Recently, Zacks.com users have been paying close attention to Alibaba (BABA). This makes it worthwhile to examine what the stock has in store.
When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?
BABA's diversified growth, AI traction, and strong financials give it the edge over BIDU in China's tech rebound.
Alibaba's AI revenue grew triple-digits for 7 straight quarters, yet trades at just 11.6x P/E. Revenue growth jumped to 18% in Q4 from 13% in Q3, with 300M+ Qwen AI model downloads worldwide. With 33.5% market share, Alibaba dominates China's cloud market, now expanding AI into manufacturing, agriculture, and SMEs.
Alibaba's recent earnings have dampened sentiment on Wall Street as the company missed both EPS and revenue estimates. However, there are several bright spots in the recent earnings numbers that can significantly improve the earnings trajectory of the company. The cloud business is showing a higher revenue growth trend with 18% YoY growth and 69% YoY improvement in EBITA.
BABA remains inherently undervalued, given its well diversified strengths in e-commerce, logistics, and cloud, despite the macro and geopolitical headwinds. Recent earnings highlight robust domestic e-commerce growth, surging cloud AI revenues, and strong international expansion, supporting its long-term upside potential. BABA's rich balance sheet and ongoing share buybacks provide a much needed margin of safety and shareholder value, with the aggressive AI investments eventually being top-line accretive.
Zacks.com users have recently been watching Alibaba (BABA) quite a bit. Thus, it is worth knowing the facts that could determine the stock's prospects.
PDD Holdings Inc.'s significant Q1 earnings miss - marked by the steep plunge in Temu-driven transaction services revenue growth - serves as a clear warning of looming tariff implications. This follows a streak of earnings disappointments reported by its core domestic and international commerce rivals, including Alibaba, from earlier this month. The ongoing tariff uncertainties are likely to amplify the strategic and structural differences between BABA and PDD, revealing how each company responds to shifting global and domestic headwinds.
BABA's AI, cloud and global retail push drive upside, while JD.com faces profit pressure despite strong revenues and user growth.
Ray Dalio, the brilliant billionaire investor over at Bridgewater Associates, made some notable moves in the first quarter that were quite remarkable.