Why Alibaba’s Stock Is Attractive
Alibaba Group is a Chinese multinational technology company that operates one of the world’s largest ecommerce portals and boasts a host of high-growth businesses. The company, founded and still backed by Jack Ma, also performs a variety of services such as digital media and entertainment, cloud computing, artificial intelligence, and mobile payments, in addition to offering traditional retail services in China. The company’s stock has been attractive to investors and analysts alike, thanks to its impressive performance and considerable potential for growth.
Alibaba Has Impressive Statistics
Alibaba’s stock is attractive for many reasons, primarily because the company’s operations are built on solid accounting and reporting principles, as well as a formidable investigative team dedicated to preventing fraudulent activity. As of May 2020, the company had reported annual sales of $21.8 billion and had 822 million monthly active users. Moreover, its share of the Chinese market for retail ecommerce was an impressive 56.5%. With a variety of new initiatives in tactics specifically aimed at Chinese domestic consumers as well as international buyers, the company appears poised for continued success. A few of these initiatives include additional marketing, logistics and payments services, improvements to the company’s already popular Taobao Marketplace service, and a series of new products like social networking.
Leadership Team Contributes To Success
The success achieved by the company over the past decade can largely be credited to its strong leadership team. Jack Ma, the company’s founder and executive chairman, has consistently demonstrated a knack for global business strategy and a unique ability to identify opportunity. Ma has also effectively hosted multiple high-profile public relations campaigns to bring attention to the company’s brand and its commitment to global recognition.
The company’s C-suite is filled out by an impressive team of executives from various backgrounds. According to Equilar, the company’s Executive Chairman, Daniel Zhang, holds a bachelor’s degree in economics from Beijing University and a master’s degree in business administration from the University of California at Berkeley. Vice Chairman Joseph Tsai holds dual JD and MBA degrees from Yale University. Chief Technology Officer Guangzhou Guo holds a doctorate in computer engineering from the University of Pennsylvania.
Strategy And Innovation Keep Growing Revenues
Alibaba’s impressive success, revenue growth, and strategy were on display during the 2019 fiscal year. During that fiscal year alone, the company saw revenue growth of 51%, with the bulk of the revenue being generated by the company’s digital media and entertainment segment.
A key innovation that has been driving revenue growth has been the company’s use of cloud computing technology. The company’s Alibaba Cloud Infrastructure as a Service (IaaS) has become a critical piece of its operation and provides the company with a wide range of cost effective and ultimately scalable services that allow the company to quickly and affordably develop innovative services.
The company is also engaging in joint and technology product development with a number of international partners. For instance, the company recently entered into a strategic partnership with the Softbank Group, a Japanese technology conglomerate, to cooperate on the development of artificial intelligence and autonomous computing.
Investors Should Consider Alibaba Stock
Given the company’s impressive performance and strong leadership, Alibaba’s stock is an attractive option for investors looking to invest in a potentially profitable Chinese equities market. The company recently announced that its market capitalization is a robust $540 billion, which demonstrates its potential to attract investors from around the world.
However, investors should also note the potential risks associated in investing in Alibaba stock. The company operates in a highly regulated industry in which competitors can often leverage political connections to gain an advantage. Additionally, the current US-China trade dispute could potentially hurt the company’s revenues in the near-term.
Nonetheless, the company has a track record of success and considerable potential for ongoing growth. It is well-positioned to take advantage of many of the latest in technological advancements, both in the Chinese market as well as internationally. As a result, it experts reasonably expect the stock to continue to be attractive to investors in the years to come.