Alibaba (BABA) stock is in a very interesting spot right now. Last week, Alibaba reported amazing earnings but the BABA stock price dropped, for two reasons: 1: the good ole, buy the news sell the rumor thing, and 2, the US Senate passed a bill last week that raised the question whether some Chinese companies would be delisted from the US exchanges.
In this video, I address some of the questions I’ve been getting from you guys, including, what will happen to the Alibaba stock if the US decides to kick some Chinese stocks out of its exchanges? Will BABA be among them? Will you still be able to trade them? Also, how is the COVID-19 pandemic treating the BABA stock? Can we expect more downfalls? Can the BABA stock make you a millionaire?
I’m going to conduct my Invest Diva diamond analysis or the IDDA for potential investment strategies for the Alibaba stock.
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Alibaba Stock Price Analysis – Fundamentals
Alibaba is the world’s largest online and mobile commerce company. It operates China’s most-visited online marketplaces, including Taobao (consumer-to-consumer) and Tmall (business-to-consumer).
In the US, the Trump administration is considering a range of sanctions on Chinese officials, businesses and financial institutions over Beijing’s effort to crack down on Hong Kong, and this could also take a hit on BABA.
How does Alibaba make money?
Last quarter, Alibaba generated 82% of its revenue from its core commerce business, which includes its e-commerce marketplaces (Taobao, Tmall, AliExpress, Alibaba.com, Kaola, Trendyol, and Lazada), its brick-and-mortar stores, and its stake in Cainiao logistics.
Most of these businesses are based in China, but AliExpress is a leading marketplace in Europe. Trendyol is based in Turkey. Lazada serves Southeast Asia. The core commerce business is Alibaba’s only profitable business; its profits subsidize the growth of the company’s other three businesses.
Alibaba’s cloud computing unit generated 11% of its revenue last quarter. Alibaba Cloud controlled 46% of China’s cloud infrastructure market at the end of 2019. Its closest competitor, Tencent (OTC:TCEHY) Cloud, held an 18% share. Alibaba is also expanding its cloud platform overseas, where it faces intense competition from Amazon Web Services (AWS).
Another 5% of Alibaba’s revenue came from its digital media and entertainment businesses. That include its media streaming platforms (Youku Tudou and AliMusic), a movie studio, the UC web browser, and the Shenma search engine.
The Alibaba stock has actually long been in my portfolio along with some other Chinese stocks that I cover routinely for our Premium Investing Group (PIG) members… If you haven’t already and would like to see how you can get three months of FREE PIG membership, go ahead, open up a new browser and type in learn.investdiva.com/yes and register your seat for my free Make Your Money Work For You masterclass.
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Alibaba Stock Long-Term Overview
Last September, Alibaba outlined its plans for the next five years: to serve over a billion Chinese consumers (up from 780 million at the end of March) and facilitate over 10 trillion yuan ($1.4 trillion) in total consumption across all its platforms.
There’s also a good chance that globalization will be a key growth driver for Alibaba in the years to come. Alibaba’s desktop and mobile monetization rates have generally been on upward trends the past few quarters, which indicates that sellers are becoming increasingly dependent on Alibaba’s marketplaces to reach Chinese consumers.
Alibaba Stock Technical Analysis
The Alibaba stock price remains above the Ichimoku cloud while struggling to reach the all-time high levels of 230.
however, long-term, we could see the Alibaba stock reaching 252, 269, and beyond. Please watch this end of this video for detailed technical analysis.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.