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Alibaba (BABA) closed at $107.89 in the latest trading session, marking a -1.63% move from the prior day.
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ADRs were getting hit following another down day for markets in the world's second-biggest economy.
The Chinese e-commerce and cloud giant still has a bright future.
Alibaba's AI and cloud businesses show strong growth potential, with advancements in AI models and increased enterprise investment in AI workloads. The e-commerce business has stabilized with high-single-digit GMV growth and innovative tools like Quanzhantui, despite intense competition and market maturity. Projected 5% revenue growth in FY25, driven by 2% e-commerce, 5% AI and cloud, and mid-teens growth in logistics.
Chinese stocks tumbled Tuesday after China reopened after a week-long holiday and disappointed investors hoping for further stimulus measures.
The Nasdaq Golden Dragon China Index took a significant hit, dropping 5.4% in its initial trading phase, marking its steepest decline since March 2023. This downturn affected numerous popular Chinese stocks.
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U.S.-listed shares of China-based e-commerce platforms Alibaba Group Holding Ltd (NYSE:BABA) and JD.Com Inc (NASDAQ:JD) are both lower Tuesday, as Chinese markets return to trading after the Golden Week holiday.
Alibaba's shares have surged 38.30% in the past month, driven by China's largest stimulus package since the pandemic and positive Q1 2025 earnings. Despite recent gains, Alibaba remains undervalued compared to U.S. tech stocks, trading at 11.57 times forward EPS and 15.76 times FCF. Risks include potential policy changes by the CCP, geopolitical tensions, and emerging competitors, but Alibaba's strong balance sheet and liquidity mitigate these concerns.