Alibaba (NYSE:BABA) raked orders worth $84.54 billion during Singles Day, the 11-day shopping festival in China, according to Business Insider. That’s up 8.45% from last year’s shopping extravaganza, where it sold products worth 498.2 billion yuan ($78 billion).
The e-commerce leader that provides the technology infrastructure and marketing reach to help merchants and businesses to leverage the power of new technology by operating online and mobile marketplaces in retail and wholesale trade has found tremendous success with expansion into new verticals.
The shopping festival, created in 2009 by the Chinese e-commerce giant, reflected its first single-digit growth since inception, and, following the report, Alibaba’s US-listed shares slipped 0.6%.
The low growth rate is mainly due to Beijing’s crackdown on everything from tech to wealth, with President Xi Jinping touting an equal society. Coupled with an ongoing US-China trade war, there’s a risk that Chinese ADRs may vanish from US exchanges.
Despite the uncertainties and many investors anxiously waiting for the delayed September quarter earnings release on 18 November 2021, BABA stock might remain bullish.
According to TipRanks’ consensus analyst rating, BABA comes in as a Strong Buy. Out of 21 analyst ratings, 19 are buys, 1 is a Hold, and 1 is a Sell. As for the price target, the average Alibaba price target is $239.79.
In return, the Public Investment Fund (PIF), Suadi Arabia’s sovereign wealth fund, nearly tripled its holdings of US-listed stocks to $43.45 billion in the third quarter, adding shares of Alibaba Group, Walmart, and Pinterest.
THE BOTTOM LINE
While Alibaba will be walking on a fine line between growing in new markets and upsetting Beijing, there’s a considerable margin of Safety to be had.
Although risks are high with any Chinese stock, the odds seem tilted on the bull’s side.
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