Alibaba as a value play? Trump, macro fears are called overblown for the e-commerce giant
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Alibaba Group Holding Limited (NYSE:BABA) was named as one of Barron’s top stocks for investors to buy into 2025, despite the lingering concerns over China’s macroeconomic issues and the threat that the incoming Trump administration could trigger a damaging trade war with the world’s second-largest economy. The stock has also been held back on some concerns that China’s stimulus efforts will fall flat.
The publication thinks Alibaba (BABA) should be considered a value play. The e-commerce stock trades at under $88, which is roughly 10X projected current-year earnings. That multiple is well below the 44X forward trading multiple for Amazon (AMZN). It was also noted that Alibaba (BABA) has a cash pile of $50 billion.
Looking ahead, Alibaba (BABA) has set several ambitious goals for 2025, focusing on growth, expansion, and innovation. The Hangzhou-based company aims to significantly expand its cloud computing segment, investing heavily in AI and positioning Alibaba Cloud as a major player in the global market. BABA also noted that the company plans to capture global markets through initiatives like AliExpress, particularly in Europe and Latin America.
Closer to home, Alibaba (BABA) intends to capitalize on China’s growing middle class and increasing online shopping trends to further strengthen its e-commerce platforms. Analysts currently forecast Alibaba (BABA) will see revenue growth of 8.5% in 2025 to $140.92 billion in fiscal year 2025.
Alibaba (BABA) bulls have also pointed out that even a protracted period of tariffs and U.S.-China trade wars could have less of an impact on revenue and profitability than feared.
Alibaba (BABA) is still well liked on Wall Street, with 37 out of 45 sell-side firms in the bull camp. On Seeking Alpha, analyst Eugenio Catone recently laid out why 2025 looks like a year of redemption for Alibaba (BABA).
Shares of Alibaba (BABA) have peeled off 4.2% over the last six weeks, while the broad market has been rallying. The dividend yield for new buyers of the stock compares favorably to other tech giants at 2.28%.