Alibaba Group Holding Ltd (BABA): Looking Beyond Pentagon’s Black List

Alibaba Group Holding Ltd (NYSE:BABA) is one of billionaire Ken Fisher’s top high growth stock picks. On June 8, the Pentagon blacklisted Alibaba Group Holding Ltd (NYSE:BABA) on claims that the company has ties with the Chinese military. Alibaba denies the accusations and has vowed to fight to clear its name.

Alibaba Group Holding Ltd (BABA): Looking Beyond Pentagon’s Black List

According to Citi analyst Alicia Yap, the Pentagon’s blacklisting does not affect Alibaba’s fundamental business operations. The analyst expects no impact on the company’s revenue or earnings because of the Pentagon’s list. The list relates to defense procurement, and Alibaba does not have a contract with the Pentagon.

As the Pentagon blacklisted it, Alibaba sought to direct attention to its expanding AI operations. On June 8, the South China Morning Post reported that Alibaba has consolidated its key AI teams under a new unit called Token Foundry. The report further stated that Alibaba CEO Eddie Wu was directly in charge of this unit.

AI-related offerings are driving profitability in Alibaba’s cloud division. The company expects AI offerings to account for more than 50% of its cloud revenue in about a year, up from around 30% now.

Alibaba Group Holding Ltd (NYSE:BABA) is a Chinese multinational technology company. It operates online marketplaces, provides cloud computing services, and offers logistics and entertainment services. The company operates through various brands, including the namesake Alibaba, Taobao, Tmall, and AliExpress.

While we acknowledge the risk and 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 time frame. If you are looking for an AI stock that is more promising than BABA and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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