5. Alibaba Group Holding Limited (NYSE:BABA)
Analysts’ Upside Potential as of April 9: 55.13%
Alibaba Group Holding Limited (NYSE:BABA), one of the best digital payments stocks, is the world’s largest online and mobile retailer in terms of gross merchandise volume. It operates several online marketplaces in China, including Tmall (business-to-consumer) and Taobao (consumer-to-consumer). The firm’s most valuable cash flow-generating operation is its China commerce retail division. Additional revenue streams include overseas retail and wholesale, China wholesale, cloud computing, digital media and entertainment platforms, Cainiao logistics services, local consumer services, and innovation projects.
AliPay, which allows for digital payments through smartphones, is just one of the many services and products in its range. As of October 2024, Alipay+ had over 30 payment partners, including leading e-wallets and bank apps from Asia and beyond, and 1.6 billion users, linking its users to over 90 million merchants in 66 markets. The stock went up by more than 14% YTD, making it one of the Best Digital Money Stocks.
Alibaba Group Holding Limited (NYSE:BABA) has posted solid financial results for the fourth quarter of 2024, including a revived growth trajectory and better operational efficiency. The company’s revenue for the quarter that ended December 31, 2024, was RMB 280.15 billion ($38.38 billion), an 8% increase over the previous year. Income from operations increased by 83% year on year to RMB 41.2 billion ($5.65 billion), fueled by lower intangible asset impairment and higher adjusted EBITA, which climbed by 4% to RMB 54.85 billion ($7.52 billion). Net income attributable to shareholders surged 333% year on year to RMB 48.95 billion ($6.71 billion), caused by excellent operational performance and mark-to-market gains on equity investments. The firm’s cloud computing segment also experienced great growth, with revenue jumping 13% year on year, driven by the rapid expansion of AI-related services.
Nightview Capital stated the following regarding Alibaba Group Holding Limited (NYSE:BABA) in its Q4 2024 investor letter:
“Artificial intelligence is no longer just a promise—it’s becoming the defining force of the modern economy. From self-driving vehicles to humanoid robotics, intelligent systems are not only enhancing efficiency but unlocking entirely new markets. These systems process and learn from vast amounts of real-world data, iterating and improving at a scale no human could achieve.
In our view, this isn’t just innovation; it’s exponential evolution. Companies leading the AI revolution are building formidable data moats, making it nearly impossible for latecomers to compete. Every mile driven by an autonomous vehicle, every task completed by an industrial robot—these actions feed a cycle of continuous improvement.
Industries like transportation, healthcare, and logistics are on the brink of massive disruption, and we believe this is a pivotal moment.
Alibaba Group Holding Limited (NYSE:BABA): Core Opportunity” Alibaba’s focus on stabilizing its core businesses, coupled with growth of its cloud and AI divisions, positions the company for a breakout. With 25% of its market cap in cash, We believe Alibaba offers a highly compelling risk / reward opportunity from a valuation perspective.
Competitive Advantage: Core Business Recovery: Alibaba’s e-commerce platforms, including Taobao with 930 million monthly active users, remain instrumental in China’s retail landscape. Revenue grew 5% YoY in the latest quarter, reflecting strategic improvements in user experience and pricing…” (Click here to read the full text)
