Alibaba stock underperformed Amazon due to slowing Chinese economy and increased competition

From Nasdaq: 2024-07-17 12:16:39

Alibaba stock has underperformed Amazon this year due to a slowing Chinese economy and increased competition. Chinese GDP growth is weak at 4.7% in Q2 2024, impacting sales. Alibaba’s cloud business has also slowed. Its stock has declined significantly in recent years, but valuation and AI growth potential make it attractive at $78 per share.
Additionally, Alibaba’s regulatory issues seem resolved, and it’s adjusting its e-commerce strategy. Valuation is compelling at 9.5x forward earnings. The company is investing in AI, with triple-digit revenue growth. With projected growth, Alibaba’s estimated valuation is $107 per share, offering a potential 37% upside from the current market price of $78 per share.
In terms of returns, Alibaba stock has returned 8% in July 2024, 1% YTD, and is down 11% since 2017. Comparatively, the S&P 500 has returned 3% in July 2024, 18% YTD, and 152% since 2017. The Trefis Reinforced Value Portfolio has returned 0% in July 2024, 7% YTD, and 658% since 2017.
Investing with Trefis’ Market-Beating Portfolios has shown strong returns compared to the S&P 500. For more details on Alibaba’s revenues and growth potential, see Trefis’ analysis.



Read more at Nasdaq: What’s Happening With Alibaba Stock?