Alibaba: Major Declines Create Buying Opportunity (Technical Analysis) (Rating Upgrade)

Summary:

• I am upgrading Alibaba to a “strong buy” due to stable quarterly earnings figures and Chinese government stimulus measures aimed at boosting economic growth.
• Alibaba’s net income surged 58% annually, driven by equity investments, while cloud segment revenues grew 7%, showing strength in AI and cloud services.
• Despite mixed earnings, Alibaba’s valuation metrics, particularly price-book ratio, indicate it remains attractively valued compared to industry peers.
• Recent price declines suggest limited downside, with support likely near $81.60, making BABA a compelling long-term growth investment.

When I last covered Alibaba Group (NYSE:BABA) (OTCPK:BABAF) on October 12th, 2024 with my article “Alibaba: Buy The Pullback”, the stock was in the process of breaking out of a prolonged trading range that had

Analyst’s Disclosure: I/we have a beneficial long position in the shares of BABA, AMZN 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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