From Nasdaq:

Investors are enjoying a bull market, but the stock market’s rally hasn’t been evenly distributed. U.S.-based Amazon’s share price surged 60%, while China-based Alibaba’s dipped 42%. The two companies face different risks, with Alibaba operating primarily in China and facing geopolitical tensions. Overall, Amazon is seen as a safer investment with strong return potential.U.S. stocks are in bull mode, but the same can’t be said for Chinese stocks. This makes it harder to get excited about Alibaba as a bull market pick. China’s economic recovery post-pandemic has been weak, and its government has taken steps to curb tech companies’ power, hurting growth potential. As tensions between the U.S. and China rise, institutional investors may reduce their holdings in Chinese stocks which could depress Alibaba’s valuation.Alibaba is considerably cheaper than Amazon, trading at just 7.2 times next year’s expected earnings. Despite potential risks, its valuation has more than accounted for the geopolitical factors, making it a worthwhile investment. Alibaba also boasts impressive revenue growth from $8.5 billion in 2014 to $126 billion in 2023. Although there are concerns about investing in a China-based company, the potential rewards outweigh the risks.Both Amazon and Alibaba offer different valuation profiles and macroeconomic backdrops, making them suitable for different types of investors. Investors seeking deep value may find Alibaba to be a better fit, while those concerned about geopolitical risks in Chinese stocks may find Amazon more appealing for investment. However, investors may also choose to own both stocks to build broad-based exposure to the global e-commerce and cloud-computing industries.

Investors looking to buy stock in Amazon should consider that the Motley Fool Stock Advisor analyst team identified what they believe are the 10 best stocks to buy, and Amazon was not one of them. Given the potential monster returns expected from other stocks, investors may want to consider other investment opportunities. However, the Stock Advisor service has a track record of success and provides regular guidance and updates to help investors build a portfolio. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of the Motley Fool’s board of directors. The Motley Fool has positions in and recommends Amazon and Alibaba Group. The views and opinions expressed by the author and analysts do not necessarily reflect those of Nasdaq, Inc.



Read more: Better Bull Market Buy: Amazon vs. Alibaba Stock