Markets rebounded slightly after U.S. President Donald Trump announced a 90-day pause on the proposed “reciprocal” tariffs. It’s no secret that have posed a major threat to global trade, fueling fears of trade wars between countries and risk driving up consumer prices significantly as well as undermining confidence.
Shares of several major Chinese companies listed in the U.S. saw gains, even as Trump raised the so-called reciprocal tariffs on Chinese goods to extremely high levels.
Among the winners was Alibaba Group (NYSE: BABA), the online marketplace giant. Alibaba stock is up 27% year-to-date and has surged 44% compared to the same time last year, but is it still a buy now?
Evolving E-Commerce & Digital Payments Landscape
More and more companies are turning to generative AI to personalize customer experiences and streamline support. At the same time, social media is having a bigger say in what people buy and how they shop. Online payments, especially through digital wallets and real-time transactions, are quickly becoming the norm.
These systems aren’t just convenient but are also helping power cross-border e-commerce, making it easier for businesses to reach customers around the globe even as issues like data security and fraud remain on the radar.
Total transaction value in the payments market is slated to hit $20.37 trillion in 2025 and balloon to $36.75 trillion by 2029 for a15.9% annualized gain. Grand View Research anticipates the global digital payments market will grow to $361.30 billion by 2030, with a CAGR of 21.1%.
Key drivers of this explosive growth include the widespread use of smartphones, increased internet access, and a rising acceptance of cashless transactions.
Where Does BABA Fit In?
Alibaba is far from a simple e-commerce company but is now a multifaceted platform offering logistics, food delivery, and cloud computing services.
That said, it’s also been directly impacted by the tariff conflict. As a China-based company caught in the middle of escalating U.S.-China trade tensions, Alibaba could either benefit from rising domestic consumption or suffer from the fallout of protectionist policies.
Tariffs on Chinese imports have recently soared to 125%, which brings the total cost of bringing those goods into the U.S. to a staggering 145% once all fees are factored in. That sharp increase followed China’s own retaliatory move, slapping tariffs of up to 84% on American products.
At first glance, this back-and-forth might seem like a headwind for a company like Alibaba. But there’s actually a silver lining. Because Alibaba has a strong presence in both the U.S. and China, the rise in tariffs may well encourage more consumers in each country to buy locally, which in turn might give Alibaba’s domestic business a meaningful lift.
At the same time, China is making a concerted push to revive its economy and boost spending at home. As the country’s biggest e-commerce platform, Alibaba is right in the sweet spot to capitalize on that momentum.
And it’s not just retail where Alibaba is making moves. The company is also going all-in on artificial intelligence. Through Alibaba Cloud, it offers a full-suite generative AI platform that helps businesses build, customize, and deploy foundational models with ease.
Looking ahead, Alibaba plans to invest RMB 380 billion or about $51.8 billion over the next three years to further scale its AI and cloud infrastructure. That kind of investment could help cement its role as a global tech powerhouse.
Additionally, a recent partnership with Apple to support AI services for iPhones in China could help Alibaba hold its ground in the country’s increasingly competitive AI market.
Alibaba’s Financial Strength
From a valuation standpoint, Alibaba currently trades at a forward non-GAAP P/E ratio of 11.99 and a forward price-to-book ratio of 1.74—suggesting the stock is priced at a relative discount versus industry averages.
Alibaba reported strong results for the fourth quarter and full fiscal year 2024 in February 2025. Revenue reached RMB 280.15 billion ($38.19 billion), slightly ahead of analyst estimates of RMB 279.34 billion ($38.08 billion).
Net income came in at RMB 48.94 billion ($6.72 billion), beating LSEG forecasts of RMB 40.60 billion ($5.53 billion). That figure was more than triple the RMB 14.40 billion ($1.96 billion) reported in the same quarter the previous year.
Should You Buy Alibaba Amid the Risks?
Wall Streeet analysts recommend owning Alibaba with 30 rating it as a “Buy,” and the average price target sits at $161.99, significantly higher than where the stock trades today.
What else can bulls cling on to? Alibaba still owns a sizable 33% stake in Ant Group, the financial technology behind Alipay, which is one of China’s most widely used digital payment platforms.
Yes, Ant’s high-profile IPO was scrapped back in 2020 and the company’s been under heavy regulatory pressure since, it’s still a giant in China’s financial system.
What’s a surprise to many is Ant Group is still making serious money, and according to Alibaba’s own filings, it pulled in billions in net income last year. And yet none of that value is really being reflected in Alibaba’s current stock price. Why? Because Ant is private, and regulatory overhang has kept its profile low. But that might not stay the case forever.
If Ant Group ever goes public, or spins off parts of its business like AI, wealth management, or blockchain, it may well unlock major value for Alibaba. In a way, Alibaba’s stake in Ant is like a hidden bonus — a “call option” on a future windfall that the market isn’t pricing in right now.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.