We recently compiled a list of the 20 High Growth Mega Cap Stocks You Can Buy And Hold For Next 5 Years. In this article, we are going to take a look at where Alibaba Group Holding Limited (NYSE:BABA) stands against the other high growth mega cap stocks.
Exactly 5 years ago, the world struggled to deal with a black swan event: the COVID-19 pandemic. There was so much uncertainty that people didn’t even know if they’d be alive in the next few weeks, let alone figure out where the market was heading. Anyone who invested in the S&P 5 years ago would have gained 83%. If you had bought at the exact bottom, you’d have gained twice that amount.
What the above proves is that the present isn’t necessarily an indicator of what the future holds. All companies that had their workflows disrupted have recovered, some more than others. Some companies have strengthened their supply chains. Others have improved their work-from-home capabilities. Industries like airlines and restaurants have modified their business models to cater to the new dynamics.
These companies have been able to deal with the changing dynamics because of their financial strength and innovation. A company’s past performance and its finances give a good idea of whether it will be able to survive bad times. That’s why when we look at the best mega-cap stocks to hold for the next 5 years, we look at how well they have grown in the last 5 years.
To come up with our list of top 20 mega-cap stocks to hold for the next 5 years, we considered stocks with a market cap of at least $200 billion and a 5-year sales growth rate of at least 10%.
An e-commerce platform displaying a wide range of products to customers online.
Alibaba Group Holding Limited (NYSE:BABA)
Alibaba Group Holding Limited (NYSE:BABA) is a marketing reach and technology infrastructure provider to brands, businesses, merchants, and retailers. It operates in Local Consumer Services, China commerce, Digital Media and Entertainment, International Commerce, and other segments. The company has grown its revenue by 19.89% over the last 5 years’.
Chinese tech stocks are enjoying a great run at the moment and Alibaba Group Holding Limited (NYSE:BABA) is already up 68% this month. The massive run is coming on the back of optimism surrounding China’s AI technologies, which continue to impress the world even if some are skeptical about them.
If investors are looking for a long-term AI investment, Alibaba Group Holding Limited (NYSE:BABA) ticks a lot of boxes. The company’s CEO has gone as far as saying that artificial general intelligence (AGI), is the primary objective of the firm’s AI ventures.
So when it comes to Alibaba’s AI strategy, our first and foremost goal is to pursue AGI. The pursuit of AGI is our primary objective. We aim to continue to develop models that extend the boundaries of intelligence.
These aren’t just meaningless words. They’re backed by the company’s technology. BABA’s Qwn2.5-VL model beats some of the models of top American tech companies in video analysis, document analysis, and math. This advancement in AI is also likely to spur the company’s e-commerce business in the same way Mark Zuckerberg was able to drastically improve Meta’s advertising business while building AI models. At a forward PE of 14, the stock is a compelling investment.
Overall BABA ranks 7th on our list of the high growth mega cap stocks you can buy and hold for the next 5 years. While we acknowledge the potential of BABA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as BABA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
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