Alibaba Caught in Tariff Crossfire: Is It Time to Buy?

Key Points

• Alibaba is now caught in the middle of a tariff fight between the United States and China, making its discounted price an opportunity.
• Fundamentally, there is no reason for Alibaba to suffer due to its business setup.
• Institutions and analysts remain bullish despite what these recent announcements may imply.

The stock market is not thinking; it is only feeling, and this is when savvy investors can make the most returns for the months to come in their portfolios. Considering that the volatility breakout in the S&P 500 is coming due to new trade tariffs announced by President Trump, short-minded participants have decided to abandon all hope in the companies considered great just a few weeks ago.

Today, it is no secret that China and Chinese technology stocks are caught in the crossfire between the United States and China regarding these tariff announcements. With this in mind, it is now time to reconsider whether all of these Chinese stocks deserve to be treated under the same bearish conclusion. There is an argument that would push for just the opposite, that there are some that are still worth looking into.

Such a name could be Alibaba Group NYSE: BABA, especially as it is one of the biggest companies in China. It is considered a blue chip name that has gotten some bullish attention lately, as the underlying developments in the business have finally started to show the higher valuation potential it has today. Now that it has been targeted as one of the main stocks to be sold in China, savvy investors can take advantage of this short-term opportunity.

Is Alibaba Clear of Downside?

This is a hard question to answer, as the market can remain irrational for longer than most portfolios can survive this sort of volatility. Therefore, these investors must rely on the tried-and-tested methods that other investors have used countless times to guide them through these market fluctuations.

Because Alibaba has fallen to only 78% of its 52-week high, the risk-to-reward setup in this stock is starting to favor the buying side rather than those looking to keep selling into it. Now, the question becomes whether Alibaba will be cleared of this tariff volatility, and there are a couple of reasons why this might be the case.

Fundamentally, there are a few reasons why Alibaba might not be as exposed to these themes as others might believe. First, most of the company’s revenue in the e-commerce space comes from Chinese consumers and others in the Asia South Pacific region, which are highly unlikely to be exposed to the effects of these tariffs.

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Second, and most importantly to the company’s higher valuation thesis, Alibaba is now looking to grow its cloud computing business by double-digit growth rates in the coming years, which is where most of the potential will be realized as far as analyst outlooks are concerned.

Knowing that Alibaba's stable commerce business and cloud computing growth engine are relatively unaffected by trade tariffs, investors could start to take a different stance on Alibaba. Far from being a thesis, some in the market have already begun to express this view.

The Market’s Take on Alibaba Stock

As of February 2025, institutional buyers from Bank of America decided to boost their holdings in Alibaba stock by as much as 7%, bringing their net position to a high of $566.1 million today. This new buying is a sign of confidence in the company’s future and a sign that these tariffs (which were announced back then) are not an issue in themselves.

More than just recent institutional buying, investors can see the recent sentiment coming out of Wall Street analysts as well. For example, those from Mizuho decided to reiterate their Outperform rating on Alibaba, this time also boosting their valuation targets to as high as $170 per share.

Since this rating came in late March 2025, it is somewhat safe to assume that the economic hit these tariffs might have had on Alibaba’s business was taken into consideration as well. Now, from today’s low price, the valuation target would call for a new 52-week high to be made and a net implied upside of as much as 46%.

If Alibaba can prove these analysts right, a new 52-week high breakout could very well ignite further institutional and retail buying, as momentum investors will start to pour in and chase the stock’s price higher. As bullish as this target may seem today, investors must also keep another factor in mind.

Alibaba stock’s all-time high price is set at just over $310 per share, so even as these analysts push for a higher valuation, it doesn’t even get close to the historical prices this company has demonstrated it can command. With this in mind, investors can now get a bargain price on a company representing a mispriced opportunity driven by fear.