Alibaba Stock: Time To Temper Your Enthusiasm

Summary:

  • I remain skeptical about long-term investment in Alibaba due to concerns over macroeconomic issues and end-market competition, despite recent stock gains.
  • The recent rally in Alibaba seems to be driven by government economic stimuli rather than company-specific financial improvements.
  • Alibaba’s financial performance shows mixed results, with declining core retail sales and net income. Growth in the cloud looks insufficient, while the international commerce segment is certainly expanding well.
  • Given the overbought Chinese market and persistent macroeconomic challenges, I believe Alibaba’s growth potential is now fully exhausted, anticipating a significant correction.

Alibaba company logo on office building

Robert Way

Intro & Thesis

I have always been skeptical about long-term investment in Chinese companies, mainly due to concerns about the VIE structure and the authoritarian nature of the CCP, which I believe hampers China’s growth prospects. These concerns kept me


Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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