Alibaba's AI Engine Is Powering A Still Undervalued Comeback

Daniel Schönberger13.7K FollowersFollow5ShareSavePlay(16min)Comment(1)Follow us on Google for the latest stock newsFollow Seeking Alpha on Google for the latest stock newsSummaryAlibaba Group Holding Limited (BABA) remains undervalued, offering a compelling long-term investment opportunity despite recent stock setbacks and macroeconomic headwinds.BABA's growth is increasingly driven by its cloud and AI businesses, with management targeting over $100 billion in combined external cloud and AI revenue within five years.The core e-commerce business continues to grow modestly, while the quick commerce segment and 88VIP membership show robust double-digit expansion.A discounted cash flow analysis suggests intrinsic value between $147 and $250 per share, supporting a bullish stance at current levels.

Getty Images In early December 2025, I wrote my last article about Alibaba Group Holding Limited (BABA) and as the stock has already declined 20% from its previous high, I argued that investors could take advantage of the recentThis article was written byDaniel Schönberger13.7K FollowersFollowMy analysis is focused on high-quality companies, that can outperform the market over the long-run due to a competitive advantage (economic moat) and high levels of defensibility. Focused on European and North American companies, but without constraints regarding market capitalization (from large cap to small cap companies).My academic background is in sociology and I hold a Master’s Degree in Sociology (with main emphasis on organizational and economic sociology) and a Bachelor’s Degree in Sociology and History.Analyst’s Disclosure: I/we have a beneficial long position in the shares of BABA either through stock ownership, options, or other derivatives. 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.