Alibaba: The Market Got This One Wrong

Alibaba Group Holding Limited stock is being punished after its disappointing June quarter results last Thursday and raising $10.2B for AI buildout this Monday.

We think the market is overreacting; BABA is still spending a fraction of its U.S. counterparts' AI CapEx even with a 75% surge this quarter.

The whole push of "show us the ROIC" is valid, but the market is taking a cookie-cutter approach to all players, and we don't think China fits the mold.

Spend is a must as compute costs rise. Qwen3.8-Max's price competitiveness plus its Cloud business and Zhenwu chips give Alibaba the tools to see more upside ahead.

We see opportunity in this BABA pullback with the ideal entry below the $100 level.