Here is the 29th edition of “Stock of the Week”. You can find all the previous analyses and my articles on my main page (for an easier search, use a computer, mobile version is harder to navigate).
Here are the links to the 3 previous “Stocks of the Week” as well
What is the potential after a 59% YTD performance? Let’s find out!
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One Pager
The stock at a glance
Recent news
Indian market. India may lift bans on AliExpress, potentially boosting international commerce
AI model launches. Alibaba introduced different new AI models for speech-to-video and image editing
Cloud computing growth. AI-driven cloud services see a double-digit revenue growth, due to Alibaba’s focus on AI infrastructure
New AI chip. Alibaba is developing a new AI chip. The chip is specifically for inferencing rather than training
Regulatory pressure. China urged Alibaba to pause Nvidia chip purchases for AI training, pushing adoption of domestic AI chips for national security
Last earnings report
Alibaba's Q1 2026 earnings reported revenue of 247.65B Yuan ($34.6B), up 2% YoY but below the forecast. Diluted EPS grew 82% YoY. E-commerce grew 10% YoY, International commerce 19%, Cloud Intelligence 26%. The “All Others” segment (including Freshippo, Cainiao, Alibaba Health, Hujing DME, Amap and other small segments) decreased 28% YoY.
Analysts’ recommendations
June, 24. Arete. Buy —> Neutral. $153
Mar, 28. Mizuho. Buy. $140 —> $170
Feb, 26. Bernstein. Buy. $104 —> $165
My analysis
Alibaba is a highly diversified company with multiple business segments. While cloud and AI are expanding rapidly, the bulk of its revenue still comes from more traditional operations, particularly e-commerce
The accelerating growth of cloud and AI presents a compelling opportunity, positioning Alibaba as an interesting play on AI outside the US as well as on broader emerging-market growth
That said, risks remain, especially those tied to Chinese equities. Valuation has also become less attractive, with the stock rerating from around 12x PE at the start of the year to roughly 20x today
Given this backdrop, waiting for a potential pullback may be prudent, even if momentum currently favors Alibaba
Technical analysis
I have defined three buying zones that I find interesting for long-term investments during pullbacks. While these zones may not be reached, I am prepared for a market (or stock) consolidation to seize long-term opportunities. For me, this approach offers a better risk/reward ratio.
Of course, this is just my opinion, and I am sharing it with you, but each investor should decide on their own investment style. With that said, here are my three buying zones for Alibaba.
Buying zone 1. $122
Buying zone 2. $80
Buying zone 3. $70
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Used source: Marketscreener.com. Affiliate link just here