Burak Finance
Head of Analytics, Growth Investor, PLTR/NBIS/RKLB
Alibaba is not a cheap Amazon, and cheap can stay cheap for a long time. It trades at 2015 prices, while since 2015 Amazon has gone from $34 to $250, Alphabet from $39 to $344 and QQQ from $100 to about $770, eleven years of missed compounding. Chinese companies should not be assumed to follow the playbook of American tech giants, just as Tencent is not Alphabet and BYD is not Tesla. x.com
Alibaba is no longer worth owning when better opportunities exist. The case for it as a China hedge was a macro feeling applied to a single company, and it ignored Jack Ma being yanked away and a lack of cloud growth while leaning on share buybacks and looking too cheap to ignore. Despite its discount to US companies, other stocks, such as GitLab and Airbnb, now look much more compelling. x.com
Alibaba's bull case ignores e-commerce margins being cut in half. A post the author replies to argues the stock is cheap at about 15x forward earnings, with cloud growth accelerating to 36% and management targeting $100 billion in annual cloud and AI revenue. x.com
Alibaba is a contrarian trade because accelerating demand for relatively cheaper compute is very underappreciated, and China's cloud market is still in its infancy versus the US. Alibaba is a consensus short as upside from closed-source AI looks illusory. x.com x.com
Alphabet's core Search growth is slowing while AI spending surges, making the selloff look deserved despite fast Cloud growth. Search growth fell from 19% to 17% to 12% over three quarters; Search now represents just under half of revenue. The stock could fall to $250, though Amazon is the preferred buy. x.com x.com x.com x.com x.com
Anthropic's accusation that Alibaba's Qwen lab distilled its frontier models is optically bearish for Alibaba, though no penalties have been enforced. Per Anthropic, the lab used thousands of fake accounts and over 28.8 million exchanges. While penalties are absent, the rewards outweigh the risks for Alibaba if distillation lifts Qwen's market share, as many US AI startups already use Qwen for its cost-effectiveness versus Gemini and others. x.com x.com
Alibaba should be taken seriously within the next three months, trading at just 10 times 2028 earnings. x.com x.com
Chinese stocks remain a value trap because cheap valuations don't matter if shareholders keep getting diluted. Per Bloomberg, Alibaba plans to raise about $10.2 billion by selling 710 million shares at HK$112.7 each, a 3.6% discount to Friday's ADR close. x.com
Alibaba's new paradigm is issuing shares, which makes the stock unattractive unless it falls by half from here. The latest example is an HK$80B ($10.2B) share placement to fund its full-stack AI capabilities. x.com
Alibaba's offering looks leaked and already priced in, and Friday's options activity points much higher. Big money dumped the stock Friday because of the leak, so at worst it retests its China low before moving up, and the stock is already way too cheap. x.com x.com
Alibaba is not worth owning while China is cashing in on the war, because a similar P/E to Microsoft does not mean similar risk. x.com
