Alibaba Group Holding Limited (BABA): A Bull Case Theory 

We came across a bullish thesis on Alibaba Group Holding Limited on The Oak Bloke’s Substack. In this article, we will summarize the bulls’ thesis on BABA. Alibaba Group Holding Limited’s share was trading at $164.26 as of December 1st. BABA’s trailing and forward P/E were 21.30 and 24.39 respectively according to Yahoo Finance.

Alibaba Group Holding Ltd. (BABA), with a market capitalization of about US$380 billion and trading at 18x P/E, is positioned as one of China’s dominant technology platforms, often described as combining the strengths of “eBay” and “Azure.” Operating in a country where 1.1 billion people use the internet and roughly 27% of retail consumption occurs online—far higher than the US and EU’s 16%—Alibaba benefits from a deeply digitalized economy. This penetration underscores how Chinese consumers purchase around 60% more online than their US counterparts, reflecting a structural advantage for Alibaba’s e-commerce ecosystem.

Beyond retail, its cloud business—largely AI infrastructure—has reported triple-digit growth for seven consecutive quarters, establishing Alibaba as a critical player in China’s digital transformation and AI enablement. Capital returns have been strong, with the company distributing US$4 billion in dividends and repurchasing US$11.9 billion of stock, equal to 5.1% of shares outstanding, signaling management’s confidence in long-term value creation. The stock has appreciated 50% in 2025, driven by improving sentiment and accelerating earnings momentum.

Furthermore, Alibaba’s Qwen3 AI model has drawn favorable comparisons—even from ChatGPT itself—which highlighted Qwen3’s superior capabilities in certain domains. This juxtaposition raises a compelling question for investors: why own OpenAI, valued at US$500 billion, when Alibaba, at US$380 billion, offers exposure to both an “Ebay-like” e-commerce powerhouse and an “Azure-like” cloud business at a fraction of the valuation? The setup presents a strong argument for Alibaba’s continued rerating potential.

Previously we covered a bullish thesis on Alibaba Group Holding Limited (BABA) by Kontra Investments in March 2025, which highlighted its e-commerce strength, AI growth, and stable margins. The stock has appreciated about 21.54% since our coverage as earnings momentum improved. The thesis still stands given resilient fundamentals. The Oak Bloke shares a similar view but emphasizes valuation rerating and AI leadership.

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Disclosure: None.