In the US stock market, I’m still bullish on BABA in the medium to long term.
In the short term, looking at the chart, things do look ugly: the 7x long position is sitting at a floating loss, the price has been grinding down from the highs all the way, and it has recently been around $122. It has been weak for several straight days. However, in the medium to long term, I don’t really see this area as a trend reversal—it looks more like a valuation and sentiment pullback after the prior rally.
There are three core reasons:
First, BABA is not the same Alibaba that used to be valued purely on e-commerce. Cloud and AI have already started to be repriced. For fiscal year 2026, cloud’s external revenue growth is expected to reach 40%, and AI-related product revenue has been growing strongly for multiple consecutive quarters. If this keeps being delivered, the market will sooner or later shift its view of BABA from “cheap China e-commerce ADR” to “AI + cloud infrastructure + consumer ecosystem.”
Second, the stock is still more than 30% away from its 52-week high, which suggests it’s not a situation where everyone is bullish at the top. Instead, it has returned to a zone of disagreement. Medium- to long-term opportunities often emerge in places like this: fundamentals are improving, but the market initially complains that profits are being pressured; once the investment starts turning into revenue and cash flow, the valuation can repair.
Third, from a technical perspective, the area around $120 is crucial. If it can hold steady there, then later it should be able to move back above 130–135, turning the trend from a weak rebound into a recovery structure. Above that, we could look at 150 and 170. The thing to watch carefully is an effective breakdown below the 115–120 range—that would indicate the market wants to keep washing.
My view: BABA is under short-term pressure now, but the medium- to long-term thesis hasn’t broken. This isn’t the kind of stock that rockets immediately on a single bullish candle. It’s more like it needs to rely on cloud, AI, buybacks, and profit recovery to gradually lift the valuation. As long as the $120 area isn’t decisively broken through on heavy volume, I remain biased toward the upside—looking for a re-rating over the next few quarters. Not investment advice.
In the short term, looking at the chart, things do look ugly: the 7x long position is sitting at a floating loss, the price has been grinding down from the highs all the way, and it has recently been around $122. It has been weak for several straight days. However, in the medium to long term, I don’t really see this area as a trend reversal—it looks more like a valuation and sentiment pullback after the prior rally.
There are three core reasons:
First, BABA is not the same Alibaba that used to be valued purely on e-commerce. Cloud and AI have already started to be repriced. For fiscal year 2026, cloud’s external revenue growth is expected to reach 40%, and AI-related product revenue has been growing strongly for multiple consecutive quarters. If this keeps being delivered, the market will sooner or later shift its view of BABA from “cheap China e-commerce ADR” to “AI + cloud infrastructure + consumer ecosystem.”
Second, the stock is still more than 30% away from its 52-week high, which suggests it’s not a situation where everyone is bullish at the top. Instead, it has returned to a zone of disagreement. Medium- to long-term opportunities often emerge in places like this: fundamentals are improving, but the market initially complains that profits are being pressured; once the investment starts turning into revenue and cash flow, the valuation can repair.
Third, from a technical perspective, the area around $120 is crucial. If it can hold steady there, then later it should be able to move back above 130–135, turning the trend from a weak rebound into a recovery structure. Above that, we could look at 150 and 170. The thing to watch carefully is an effective breakdown below the 115–120 range—that would indicate the market wants to keep washing.
My view: BABA is under short-term pressure now, but the medium- to long-term thesis hasn’t broken. This isn’t the kind of stock that rockets immediately on a single bullish candle. It’s more like it needs to rely on cloud, AI, buybacks, and profit recovery to gradually lift the valuation. As long as the $120 area isn’t decisively broken through on heavy volume, I remain biased toward the upside—looking for a re-rating over the next few quarters. Not investment advice.