Gavin GrahamAlibaba Group HoldingBABAHOLDJun 16, 2023

Looks great on the numbers -- growth rate, EPS, etc. Trouble is you don't know what's going to happen with the Chinese government. This is a known hazard. Even when you do everything right with your portfolio, you'll still be hit by the unexpected. As an investor, you need open markets and the rule of law.

Critics say they're overspending on AI, like Meta, and not seeing a return, but cloud growth was 38% and cloud is their engine. The story is well intact. It's his way of playing AI in China.

He bought more around $150s because it's cheap. The PE is only 18x. They enjoy the tailwinds of cloud and AI. Losses are narrowing in e-commerce. Fundamentals are intact.

The momentum has returned and he thinks they will execute well.

He bought it at the wrong time, but is a great story and undervalued. It will do well in 2026.

Trades cheaply and has the best and most complete story in China. Trades at 17x PE 2026. He added shares today.

E-commerce and cloud computing (the most nascent piece). E-commerce is under a lot of strain. AI large-language models are compelling in Chinese market, but that entire market is very competitive and ripe for disruptors. A trading stock over the next 2-3 years. Not a buy-and-hold. Tactically a buy today, but be very careful.

Loves the stock. But can't ethically invest in it because one of his firm's researchers works for BABA. Follows it, and his 12-month price target is $151.50. Cloud, commerce, digital media and entertainment, innovative initiatives. Only wildcard is the Chinese government.

The country square in the bullseye of the US during the tariff war is China. Until there's resolution in tariffs, don't touch China. The future is unknown and could be negative. Both countries are at each other's throats.

He just bought it. It has momentum, just taking out its recent 6-month high at $118, and has a path towards $150.

Chinese stocks have been moving up, partly because of outflows from India and into China. BABA is the best of China's stocks with the most upside. It's close to returning to its high.

Like Amazon, they dominate key secular growth areas in e-commerce, are in cloud computer though trade at only one third of Amazon's PE. Is a modest grower, but has a huge margin of safety. There's so much pessimism about tariffs now. Wait and see, but would be an opportunity if the tariffs are more bark than bite.

Challenges: Trump's presidency who was negative towards China before. Revenues continue to rise, but earnings have been cut in half from the peak. Also, regulators in China tend to meddle in companies. 

He saw it as a cheap way to play China's resurgence. He round-tripped it, up and down. We've reached peak pessimism here, so you can own it now.

It's the only Chinese stock he will recommend. Maybe Trump will do something more creative than Biden did towards China.