Alibaba: Burry Sold, But The Math Still Says Strong Buy

Agar Capital 5.4K Followers Follow Summary Alibaba remains a Strong Buy after its $10.2B share issuance, as the market reaction appears far larger than the actual economic dilution. Cloud revenue grew 45% YoY, Cloud EBITA margin reached 12%, and AI-related revenue has now posted triple-digit growth for twelve consecutive quarters. The key number is 0.13%; that is the estimated theoretical dilution impact on BABA’s ADR price, far below the sell-off investors associated with the deal. The real debate is not dilution but whether Alibaba can turn massive AI spending into attractive returns. I believe the market is underestimating that upside. Robert Way/iStock Editorial via Getty Images Investment Thesis This time, Alibaba Group Holding Limited ( BABA ) forced me to recalculate. Like many who keep a close eye on BABA, you likely know that Alibaba’s cloud business is expanding faster than investors This article was written by Agar Capital 5.4K Followers Follow I’m a Portfolio manager (flexible equity funds and private clients), fundamental equity research, macro and geopolitical strategy.Over 10 years across global markets, managing multi-asset strategies and equity portfolios at a European asset manager.I combine top-down macro, bottom-up stock selection and real-time positioning (Bloomberg, models, data).I focus on earnings, tech disruption, policy shifts and capital flows — to identify mispriced opportunities before the market.On Seeking Alpha I share high-conviction ideas, contrarian views and deep breakdowns of both growth and value names.For more insights: follow me on X @AgarCapital Analyst’s Disclosure: I/we have a beneficial long position in the shares of BABA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.