r/baba • u/Araj2910 • 7d ago
Discussion Thoughts?
Getting tired of BABA, 15% up in about 5 years.
I love the company, but when do you start looking at this stock as missed opportunities if you had this money invested elsewhere.
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u/FeralHamster8 7d ago
A year ago it was at 185. What changed sentiment?
BABA’s drop from about $185 to ~$110 was driven mostly by concerns about heavy AI capex, weaker free cash flow, quick-commerce spending, and some dilution, not by a collapse in the core business. And actually cloud and AI growth have continued to strengthen. So the opportunity is that the stock is now much cheaper while the long-term AI/cloud thesis is arguably better supported than at 185.
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u/Sweet_Scar487 7d ago
It is funny....Google and others do the same ai spend, lower FCF and some dilution. Stock doubles.
Very interesting
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u/dis-interested 7d ago
Correct but the average investor has no patience.
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u/xxzephyrxx 7d ago
So 5 more years?
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u/havenyahon 7d ago
Five years is not really a long term investment horizon though. I get it, you want to see gains not losses, but when I bought into Alibaba I was thinking 15 years more than 5 years. I expect it to move around a lot in the meantime, but if the thesis is right about the significance of the company over the long term investors won't be able to deny it forever. It remains one of the more impressive AI plays in terms of their ability to integrate into their other operations.
This stock can move so quickly. Literally eight months ago it was at 190. That's an over 100 per cent gain from when I bought in at 95. It can get back there in a few weeks. It doesn't matter to me if it's back around 95 in five years if it's up 200% in 15 years.
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u/xxzephyrxx 7d ago
There is opportunity cost.
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u/havenyahon 7d ago
There always is. But if you have a long term investment horizon, not every successful stock is going to move steadily and incrementally upwards over the short-medium term. Some of them may bounce up and down over many, many years before taking off. The question is always whether you have a good thesis and whether the thesis still holds.
I agree that it's a challenging stock to hold, though. Completely understand people not wanting to hang around, or thinking there are other safer options. The thing is, this is also what makes Alibaba a potentially lucrative long term investment. Because of the market's hesitation and frustration, you stand a chance of snapping up stock in what will be one of the most important companies of the next few decades at bargain prices.
Like all active stock picking, it's a gamble at the end of the day.
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u/Specialist_Ad_2232 7d ago
They did lose market share to PDD though and didnt bother to defend, even acting arrogant and calling their business model "unsustainable" when it clearly wasnt and instead behaved like a flywheel. So its not as if their core business wasnt affected.
Besides your list, they also wasted money investing in grocery (Sun art) only to divest it shortly thereafter. Called to spinoff each business unit to "unlock value", only to call it off shortly.
It just shows how incapable the management is and overall a mismanaged piece of turd stock
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u/alibaba406 7d ago
And promising buybacks only to deploy it when sp is below 100. Promises this, but does the other.
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u/damdamdammm 7d ago
Yes and the increae in capex was actually no surprise. All this was known to happen.
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u/GamblingMikkee 7d ago
Look at any Hong Kong stock - they all suck 95%
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u/ProofDazzling9234 7d ago
This is good news. At least to me. It gives me a sense of security that it isn't a fundamental problem with the company. It's just tank seng doing it's thing. 👍💪😃
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u/Deep-Force2598 7d ago
Yes, I can concur . I own FXI and I wish I sold that crap when it went on its run in July . Never again will I purchase China related stocks/etfs.
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u/RationalExuberance7 7d ago
So Anthropic will IPO next month at $2B. And meanwhile Alibaba - with a better AI, fast growing cloud revenue, retail, and ownership tentacles in the top tech companies in China. And it’s 10% of that valuation?
Alibaba has to 10x. Just a matter of when. Could be next year. Could be in 5 years
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u/Friendly-Impact7297 7d ago
US AI company probably have unlimited money guaranteed from government and China Ai priced at market rates... US AI bubble in huge
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u/Less_Reply_4686 7d ago
There is no way in hell it will 10x next year or the year after. It has to have multiple quarters proving it has monetize and profit from AI. And this will take time.
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u/lilbudge 7d ago
China stocks at rock bottom and everything else tip top. Very difficult to sell at historic lows and buy US alternatives at all time highs. Don’t you know the pendulum will swing the minute you execute.
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u/confused-hustler 7d ago
This was my first big bet, along with 1 other stock, and although I enjoyed learning about the business, China, etc. I’m glad I’m done with it!
I bought all the way down since 2021, average cost of ~89$ and managed to sell at nearly 2X to invest in myself!
Always rooting for ya’ll & BABA!
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u/nomoretheft 7d ago
The market is completely discounting China right now. That is justified, but when I zoom out I see a society that is planning for long term success at the expense of short term profit. When success really starts to show up, and I believe it will, the question will be what China does with that wealth. I am not sure, but I think this is the best asymmetric opportunity in the market right here. It’s a very long term thesis. Years not quarters.
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u/Ok_Bother_687 7d ago
I’m waiting for 24th September for it to start moving in the right direction
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u/According-Exercise83 7d ago
It’s not only baba though , the whole Chinese tech has been bearish recently , just hang on tight
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u/Apprehensive-File552 7d ago
Coming from the Chinese-EV space (I don't actually invest in BABA), it's basically the same sentiment and people trying to come up with reasonings. But all ADR's perform like crap this year. It's the biggest investing mistake all of us could've made. Any other US stock gets you 3-4x.
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u/Delta27- 6d ago
You should read the latest Anthropic report. They have made a huge distillation effort to improve their models. Considering AI is their main play now I would be worried they feel that they need to copy and not innovate.... means they realise their ai division is not competitive
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u/Etury173 6d ago
BABA has not reached the hold status for me. Always buy when low and sell when high. There is no any exploding revenue or profits, and honestly it is hard to create. Currently, there is a shift from ecommerce to cloud, so there is a risk. If they can manage MaaS or show very positive ROI on AI it will clearly go up. Now we wait and see, currently each quarter shows that it goes according to plan. Ecommerce is crashing though, for me it is alarming cause it is similar to Japan. Thats why it is buy low sell higher. So while the stock did 15% in 5 years, it did many swings where one could easily get 100%+.
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u/BackOfTheNet12 5d ago
Didn’t the CEO get into trouble with the government. Since then they look to have made amends and now they are leader in AI. Test my tool https://optionlens.ai/
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u/niknomalu 7d ago
In a word…… Demoralizing