New York, Jan 17, 2026, 21:25 EST
Alibaba Group Holding’s U.S.-listed shares, traded as ADRs, fell 3.24% on Friday, ending at $165.40 after dipping to a low of $163.49. The stock swung between $163.49 and $169.85 during the session, with 18.60 million shares traded. (Investing)
The pullback counts because Alibaba stood out as one of the cleaner “China tech is back” plays in U.S. markets. Its recent rebound sparked sharply divergent opinions on its true value.
The gap is growing as investors weigh the prospects of accelerated cloud and AI expansion against the expenses of entering new markets, where competitors are slashing prices and margins disappear quickly.
GuruFocus reported Alibaba slipping 3.64% in mid-day trading on Jan. 16 before paring some losses. The stock remains about 14.5% below its 52-week peak. Alibaba’s market cap clocks in near $397.2 billion. Of the 51 analysts tracked, the average price target sits at $196.78, while GuruFocus’s own “GF Value” estimate is $83.38. (GuruFocus)
Simply Wall St analyzed the stock following a 111% gain over the past year, using its two-stage discounted cash flow (DCF) model to estimate an intrinsic value of $281.17 per share—roughly 39% higher than the current price. The firm also noted Alibaba’s price-to-earnings ratio stands at 21.22, which exceeds the average for the multiline retail sector but remains below the peer group average, including companies like Amazon and PDD Holdings. (Simply Wall St)
In a note from Dec. 31, Oakmark Global Fund’s portfolio managers, including David G. Herro, pointed out that Alibaba’s “Cloud revenue growth is accelerating.” However, they also flagged that earnings took a hit because of heavy spending on subsidies aimed at expanding its quick commerce segment. (Amazonaws)
Quick commerce means speedy delivery of groceries, meals, and small goods, with platforms frequently subsidising orders to grab market share. It boosts user demand but can rapidly drain cash reserves.
Valuation here is fragile. Alibaba operates in a space where policy changes and cross-border friction can flip sentiment within days. Bulls still expect spending to slow but cash flow to hold steady. Bears highlight rising competition in cloud and AI, plus the risk of a hangover from heavy subsidy-fueled growth.
At present, the stock sits caught between lofty upside targets and valuation models that start from different assumptions. The key question ahead: can Alibaba grow its cloud and new services without letting the costs weigh down the income statement?
