Alibaba: China Woes Will Subside And This Undervalued Powerhouse Will Thrive

Summary:

• Alibaba’s Q2 results show 5% revenue growth, despite a 70% drop in free cash flow due to heavy investments in Alibaba Cloud.
• Alibaba Cloud’s AI product growth has been triple digits for five consecutive quarters, positioning BABA for future profitability.
• Strong balance sheet allows BABA to invest in high-growth areas and weather China’s economic challenges, while international growth remains robust.
• Despite China’s economic risks, Alibaba’s valuation metrics make it one of the cheapest quality stocks globally, presenting a significant investment opportunity.

Introduction

Alibaba (NYSE:BABA) is a stock I’ve owned since the beginning of 2024 where I bought in at around $75. Today the stock price sits at $85 but I think we have a lot more room to run

Analyst’s Disclosure: I/we have a beneficial long position in the shares of BABA either through stock ownership, options, or other derivatives. 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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