Alibaba Q3 Preview: The Only Number That Matters

The Techie4.54K FollowersFollow5ShareSaveCommentsSummaryAlibaba Group Holding Limited remains a Buy ahead of earnings in my books, as I think the negatives are well-priced in, and risk-reward is now favorable after the pullback.BABA’s valuation is compelling, trading at a steep discount to US cloud peers despite robust cloud and AI growth, notably with Qwen’s global adoption.The key near-term catalyst is sustained cloud revenue growth; the last quarter saw 34% year-over-year growth and triple-digit AI product growth for nine consecutive quarters.Earnings expectations are low, with consensus projecting profit pressure from higher capex, but strong cloud and AI signals could drive upside. Guido Mieth/DigitalVision via Getty Images Alibaba Group Holding Limited (BABA) has gone out of the market’s favor, and not for good reason. The stock is down around 12% over the past month, down another 16% over the past 6 months, and down another 7% year-to-date. TheThis article was written byThe Techie4.54K FollowersFollowI’m a retired Wall Street PM specializing in TMT; since kickstarting my career, I’ve spent over two decades in the market navigating the technology landscape, focusing on risk mitigation through the dot com bubble, credit default of ‘08, and, more recently, with the AI boom. In one word, what I’d like my service to revolve around is momentum.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.