Alibaba has a decent bull case that the market is ignoring after pricing in dilution from its $10.2B stock sale. Most investors didn't look at why or how Alibaba raised the money. Insiders clearly saw it differently, adding over $100M in shares. A deeper top-down and bottom-up analysis with @AlphaPicks shows there is much more to the story than "dilution is bad". x.com 

Alibaba's 8.5% drop on its $10 billion discounted raise punishes the one thing that is working, its AI build-out. Bloomberg says the raise was three times oversubscribed, and the chairman and CEO bought $15 million of stock the same afternoon. Cloud revenue grew 45% last quarter, per Alibaba's June filing, AI product revenue has grown triple digits for twelve straight quarters, and its open model Qwen passed 3 billion downloads to become the most used AI. The dilution reaction ignores that. … Show more

Alibaba's $10.2 billion Hong Kong share placement shows its cash burn has caught up with it, and more dilution is likely. Core China ecommerce makes roughly $30 billion of flat EBIT, half of it reinvested in quick commerce to defend share against PDD. Cloud and AI earns $2 billion of EBIT growing 35% but burns about $10 billion a year in AI-model opex. Pro forma EBIT of about $7 billion collapses after $20-25 billion of annual capex, so Alibaba will keep tapping equity markets. 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 raising capital for AI after a strong quarter is a buying opportunity, especially with CEO Eddie Wu buying shares right after the raise. In June, heavy buybacks near $94.80 preceded a rally to $132. Stanley Druckenmiller starting a Baidu position, despite saying he would not invest in China under Xi, signals a bet on Chinese AI and cloud. Chinese names are cheap and underappreciated, with strong AI models, power access and robotics leadership, while the US faces data-center hurdles. … Show more

Alibaba's HK$80 billion share placement, the largest in Hong Kong history, dilutes shareholders to fund AI just as the market rewards free cash flow and buybacks. Q2 free cash flow was -44.7 billion with capex of 67.7 billion, and the food-delivery war burned 80-100 billion, about what the placement raises. Selling shares after buying back at ~$97/ADS recasts a value stock as a growth bet. The deal was oversubscribed at a modest discount; the test is whether per-share free cash flow rises. x.com  … Show more

Alibaba should be taken seriously within the next three months, trading at just 10 times 2028 earnings. x.com  x.com 

Alibaba at $110 is one of the most mispriced mega-caps because investors effectively get its AI and cloud business for free. The company is worth about $270B and holds around $70B in cash and liquid investments, while core e-commerce generated almost $5.9B of adjusted EBITA in one quarter, roughly $230B annualized at just 10x. AI and cloud may be Alibaba's most valuable part five years from now. 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 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