From NASDAQ:

Investors in Chinese stocks are disappointed; while US markets are at new highs, Chinese stocks have tumbled to their lowest levels in five years, with Alibaba shares falling below their IPO price. Economic indicators and structural issues are contributing to the negativity surrounding Chinese stocks, making them “uninvestable” for many.

The sentiment towards Chinese stocks is quite negative, and valuations have taken a hit due to President Xi Jinping’s economic policies, escalating tensions between China and the Western world, and the U.S.-China trade/tech war. In Q4, Alibaba scrapped plans to list its Cloud business, attributing it to U.S. chip export restrictions.

The outlook for Chinese stocks as an asset class is hazy, but despite increased risks, Alibaba stock, with its single-digit price-to-earnings multiples, high free cash flows, and reasonably good growth outlook, looks worth the risk. Chinese stocks are at the capitulation stage, and there is widespread fear, but many believe that they will eventually recover, including Alibaba co-founder Jack Ma and analyst firm Jefferies, which lists Alibaba among its top global picks with a target price of $133.

BABA has a consensus rating of “Strong Buy,” and its mean target price of $116.19 is 60.6% higher than current price levels. Analysts see good upside in BABA stock, and for long-term investors who can be patient amid the volatility, Alibaba looks like a good stock to buy, considering the risk-reward is compelling at current prices.



Read more: Alibaba Stock 2025 Forecast: Will BABA Ever Recover and Go Back Up?