Chinese internet giant Alibaba (BABA) on Thursday called off plans to spin off its cloud services business, citing U.S. restrictions on chip exports. BABA stock tumbled on the news, which overshadowed an earnings report that topped estimates. Alibaba stock https://traderoom.info/ got turned away at its 200-day moving average in mid-May after the Chinese e-commerce giant reported its fourth straight quarter of declining revenue. Alibaba (BABA) on Nov. 16 reported an 18% rise in quarterly profit, with revenue up 6% to $30.8 billion.
- Today, we learned that Alibaba is cutting its investments even more (albeit indirectly).
- It’s hard to be bullish on China’s tech plays as they face continued turbulence and negative economic headlines over the coming quarters.
- Zacks Earnings ESP (Expected Surprise Prediction) looks to find companies that have recently seen positive earnings estimate revision activity.
- Its core platform, Alibaba.com, is the world’s 3rd largest eCommerce platform by sales.
- Tyrik Torres has been studying and participating in financial markets since he was in college, and he has particular passion for helping people understand complex systems.
Since 1988 it has more than doubled the S&P 500 with an average gain of +24.18% per year. These returns cover a period from January 1, 1988 through January 1, 2024. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations.
Research Reports for BABA
When markets crashed during the 2008 financial crisis, he made the call to plow some of the company’s money into stocks and started managing its investments. As we march further into 2024, sophisticated large language models (LLMs) could change the way we view our smartphones. Additionally, as Baidu looks to innovate on the front of AI whilst staying within the guidances put forth by regulators, I view the company as potentially one of the cheapest AI stock picks in the market. The messy restructuring, increased competition, and shelved IPO of its cloud arm has left Alibaba’s stock scarred.
Price Target and Rating
Of the three Strong Buy-rated stocks, analysts see the most upside potential in BABA (61.2%) for the year ahead. The e-commerce giant has engaged several potential buyers for its extensive network of over 100 stores and malls. From shelving its cloud computing unit’s IPO to falling behind in market capitalization to competitors, the company that was once Asia’s most valuable tech company, seems to have lost its way. A year earlier, Alibaba reported adjusted earnings of $1.81 per share and sales of $29 billion. Alibaba first announced the spinoff in March as part of a broader reorganization of the company.
Daily Journal’s first portfolio filing dates back to the fourth quarter of 2013, likely because that’s when the value of its holdings breached the $100 million reporting threshold. The publisher and legal-software provider disclosed 2.3 million shares of Bank of America, almost 1.6 million shares of Wells Fargo, 140,000 shares of US Bancorp, and 64,600 shares of South Korean steelmaker Posco. Munger, best known as Warren Buffett’s right-hand man and Berkshire Hathaway’s vice chairman, died aged 99 on November 28. He chaired Daily Journal’s board for about 45 years from 1977 to 2022.
Is It Time to Buy BABA? Shares are up today.
It also imposed tighter rules on the sale of chip equipment to China. The company said in June that Zhang was departing as chairman and CEO of the company to focus on Alibaba’s cloud intelligence unit. In May, Alibaba announced plans to spin off its cloud business as a separate, publicly traded company. BABA stock gapped above its 50-day moving average on Nov.15, helped by a strong earnings report from Chinese internet giant JD.com (JD).
Adjusted profit increased 37% to $2.40 a share, nicely above the consensus estimate of $2.02. Revenue increased 5% to $32.3 billion, above the $30.7 billion consensus. The top-line growth halted four straight quarters of revenue declines.
BABA Alibaba Group Holding Ltd – ADR
Undoubtedly, there’s a high degree of geopolitical risk in investing in any Chinese stock. And as the Chinese economy continues battling headwinds, questions linger as to how much lower the broader basket of Chinese tech stocks can go. Additionally, sectors outside of technology, such as the Chinese hotpot restaurant chain Haidilao and sportswear manufacturer Li Ning, saw substantial increases in their stock prices. This positive shift in sentiment got a further boost from a private survey indicating that China’s manufacturing industry expanded for a third consecutive month in January. This provides an immense opportunity for value investors who are looking to hold long-term. BABA’s shares currently trade at 7.7x forward earnings and 4.7x forward EBITDA.
Now, closing in on the end of January, Alibaba’s shares have plummeted an additional 10%. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. Today, we learned that Alibaba is cutting its investments even more (albeit indirectly). Alibaba Group (BABA 0.40%) stock marked its fourth straight day of declines on Wednesday, falling another 2.6% through noon ET.
Every once in a cycle, the market experiences hysteria, whether on the upside or the downside. These are some of the best moments to pick a direction to expose your portfolio to potentially explosive … The Zacks Industry Rank assigns a rating to each of the 265 X (Expanded) Industries based on their average Zacks Rank. As an investor, you want to buy stocks with the highest probability of success. That means you want to buy stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Score of an A or a B in your personal trading style.
Jack Ma and 17 others founded Alibaba’s online marketplace in 1999, and achieved profitability for the first time in 2001. As PDD stock gained ground on the back of Temu, Alibaba has continued to sink further into the abyss. At writing, shares are back to $73 and change per share and are closing in on the lows (of around $58) they briefly touched back in late 2022.
Therefore, let’s tune into TipRanks’ Comparison Tool to check in with three U.S.-listed Chinese tech stocks that Wall Street thinks could gain in 2024. China is already weighing a stimulus package of $278 find programmers for startup billion (2 trillion yuan) to drive the stock market. If investors choose to allocate now, they could lock in a cheap price for a company that is still, despite the controversy, immensely valuable.
In their Q3 earnings report, cloud revenue grew 2% Y/Y to $3.8 billion, driven by demand in public cloud products and services. Alibaba’s cloud business only grew at low single-digit rates in the first half of fiscal 2024, but its growth could accelerate again as the macro environment improves. Its smaller logistics, local services, and digital-media units are still growing at double-digit rates, and they could eventually diversify its top line away from its e-commerce and cloud businesses.
Even as consumer balance sheets get stretched further, it’s tough to resist the allure of cheap goods and the ability to “shop like a billionaire,” even with a somewhat stricter budget. First, we have PDD Holdings (best known as Pinduoduo), which has been one of the hottest Chinese stocks over the past two years. Shares have shot up more than 275% since ricocheting off their lows back in May 2022. Though the exponential past year of gains has put new highs within striking distance, there’s a new slate of potential hurdles that could spark a pullback.
Lastly, Alibaba’s insider purchases and buybacks also indicate its stock is on sale. Co-founders Jack Ma and Joseph Tsai recently bought $200 million in shares, and the company bought back $4.8 billion in shares in the first half of fiscal 2024. From fiscal 2023 to 2026, analysts expect Alibaba’s revenue to expand at a compound annual growth rate (CAGR) of 8%. That’s a lot slower than its double-digit growth over the past decade, but the company isn’t headed off a cliff yet.