Stock of the Week: Why Alibaba Is Our Top Pick Right Now
December 3, 10:09 am
Alibaba (BABA) continues to stand out as one of the strongest comeback stories in global tech. The stock trades at $157, down slightly in the past month but still up 84% year over year as investors warm back up to China’s tech giants and Alibaba’s strategic reset.
While the latest earnings introduced short-term profit pressure, the underlying data tells a clearer story: demand is climbing, hiring is expanding, engagement is accelerating, and sentiment around the stock is turning sharply positive. These are the signals we look for when selecting a stock of the week.
Why Alibaba is Our Stock of the Week
Alibaba’s Q2 FY2026 results appeared mixed, but the context matters. Revenue grew 5%, beating expectations, while profits declined due to aggressive investment in AI and quick commerce - a trade-off the company is making to set up long-term growth. When paired with the alternative data, the picture becomes even more compelling.
Earnings Snapshot
- Revenue increased 5% to 247.8 billion yuan, ahead of estimates.
- Adjusted earnings dropped 71% year over year as reinvestment accelerated.
- AI-driven cloud revenue grew at triple-digit rates for the ninth consecutive quarter.
- International commerce revenue jumped 34.5% year over year and turned profitable.
In short: the top line is stable, AI and cloud are booming, and profitability is temporarily weighed down by strategic spending.
Demand and Engagement Are Surging
Looking closer at alternative data:
- 186M monthly visitors to Alibaba.com - an all-time high.
- Instagram following up 19.7% year over year (13.7M).
- Facebook following up 12% year over year (28.7M).
These jumps in traffic and social metrics are strong leading indicators of rising global consumer activity.
Hiring Momentum Points to Expansion
- Headcount up 4% year over year accorsing to LinkedIn data.
- 1,000 open job postings, up 10%.
Many roles are in AI, cloud infrastructure, and platform engineering — areas that typically lead revenue growth cycles.
Regulatory and Policy Positioning Looks More Positive
Alibaba’s risk profile in the U.S. appears more balanced than headlines suggest.
- U.S. Representative Gilbert Cisneros, who sits on the House Armed Services Committee, disclosed multiple Alibaba share purchases in October - an unusual and noteworthy signal for a China-linked tech company.
- Alibaba is projected to spend up to $3M on U.S. lobbying this year, its highest in years, indicating proactive engagement on trade, AI, and cross-border commerce issues.
Together, these signals suggest a policy environment that is stabilizing rather than worsening.
Analysts Are Overwhelmingly Bullish
According to our data, 92% of analysts currently rate Alibaba a Buy. This is one of the strongest consensus ratings among major Chinese tech stocks and reflects growing confidence in Alibaba’s turnaround efforts, cloud leadership, and long-term AI positioning.
Our Conclusion
When combining earnings context with rising platform engagement, increasing hiring, proactive policy strategy, and near-unanimous analyst support, Alibaba looks significantly stronger than its short-term profit dip suggests.
Our model yields:
- AI Score: 67
- 6-Month Price Target: $181
- Upside Potential: ~15%
In short, Alibaba is reinvesting aggressively into AI, cloud, logistics, and international expansion - and the alternative data clearly shows these moves are resonating. With more users, more hiring, stronger global reach, stabilizing regulatory sentiment, and overwhelming analyst support, Alibaba earns its place as this week’s top pick.
Disclaimer: The information provided is for educational and informational purposes only and should not be construed as financial or investment advice. All investments involve risk, and you should conduct your own research or consult a qualified professional before making any investment decisions.
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