When former chairman Jack Ma said Alibaba’s (NASDAQ:BABA) Single’s Day sales disappointed, that put a dent on the stock’s rally. That is just one opinion. Alibaba’s revenue grew over last year’s Single’s Day event. It affirms investors' rationale to hold the stock.
Alibaba reported sales of $38.4 billion on the day. This is an incredible number but investors cannot ignore some numbers. Growth stalled to 26%, down from 27% in 2018. Plus, 80% of the revenue is dependent on e-commerce. Despite the lower pace of growth, the absolute sales number is impressive. At around $182, BABA stock trades at 20 times forward and current P/E levels.
The BABA stockholder should still expect more. Shares are stuck in a trading range, moving nowhere in two years. Conversely, Amazon.com (NASDAQ:AMZN) acquired a grocery chain, grew AWS, and expanded its home assistant product line. Alexa’s advancements and the growth in Amazon Prime streaming video put BABA stock behind.
Alibaba stock has a macro headwind that is hurting the stock. The U.S./China trade war is an ongoing risk factor that is hurting BABA’s stock price. Also, the Chinese consumer strength may stall as the U.S. protectionism increases. More likely, American consumers are stronger and healthier than Chinese ones.
AMZN stock may not have favorable valuations but BABA’s discount alone does not justify buying the stock.
