Alibaba Group Holding Limited, through its subsidiaries, provides technology infrastructure and marketing reach to help merchants, brands, retailers, and other businesses to engage with their users and customers in the People's Republic of China and internationally. The company operates through seven segments: China Commerce, International Commerce, Local Consumer Services, Cainiao, Cloud, Digital Media and Entertainment, and Innovation Initiatives and Others. It operates Taobao and Tmall, which are digital retail platforms; Alimama, a proprietary monetization platform; 1688.com and Alibaba.com, which are online wholesale marketplaces; AliExpress, a retail marketplace; Lazada, Trendyol, and Daraz that are e-commerce platforms; Freshippo, a retail platform for groceries and fresh goods; and Tmall Global, an import e-commerce platform. The company also operates Cainiao Network logistic services platform; Ele.me, an on-demand delivery and local services platform; Koubei, a restaurant and local services guide platform; and Fliggy, an online travel platform. In addition, it offers pay-for-performance, in-feed, and display marketing services; and Taobao Ad Network and Exchange, a real-time online bidding marketing exchange. Further, the company provides elastic computing, storage, network, security, database, big data, and IoT services; and hardware, software license, software installation, and application development and maintenance services. Additionally, it operates Youku, an online video platform; Quark, a platform for information search, storage, and consumption; Alibaba Pictures and other content platforms that provide online videos, films, live events, news feeds, literature, music, and others; Amap, a mobile digital map, navigation, and real-time traffic information app; DingTalk, a business efficiency mobile app; and Tmall Genie smart speaker. The company was incorporated in 1999 and is based in Hangzhou, the People's Republic of China.

Alibaba Group Holding Limited

Below is Validea's guru fundamental report for ALIBABA GROUP HOLDING LTD - ADR (BABA). Of the 22 guru strategies we follow, BABA rates highest using our Growth Investor model based on the published strategy of Martin Zweig. This strategy looks for growth stocks with persistent accelerating earnings and sales growth, reasonable valuations and low debt.
ALIBABA GROUP HOLDING LTD - ADR (BABA) is a large-cap growth stock in the Retail (Specialty) industry. The rating using this strategy is 62% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of ALIBABA GROUP HOLDING LTD - ADR
More Information on Martin Zweig
About Martin Zweig: During the 15 years that it was monitored, Zweig's stock recommendation newsletter returned an average of 15.9 percent per year, during which time it was ranked number one based on risk-adjusted returns by Hulbert Financial Digest. Zweig has managed both mutual and hedge funds during his career, and he's put the fortune he's compiled to some interesting uses. He has owned what Forbes reported was the most expensive apartment in New York, a $70 million penthouse that sits atop Manhattan's Pierre Hotel, and he is a collector of all sorts of pop culture and historical memorabilia -- among his purchases are the gun used by Clint Eastwood in "Dirty Harry", a stock certificate signed by Commodore Vanderbilt, and even two old-fashioned gas pumps similar to those he'd seen at a nearby gas station while growing up in Cleveland, according to published reports.
Additional Research Links
Harry Browne Permanent Portfolio
High Shareholder Yield Stocks
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

BABA Quantitative Stock Analysis - Martin Zweig

Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Avantis Emerging Markets Equity ETF (Symbol: AVEM) where we have detected an approximate $200.7 million dollar inflow -- that's a 1.4% increase week over week in outstanding units (from 181,800,000 to 184,400,000). Among the largest underlying components of AVEM, in trading today Alibaba Group Holding Ltd (Symbol: BABA) is up about 2.1%, NetEase, Inc (Symbol: NTES) is up about 0.1%, and ICICI Bank Ltd (Symbol: IBN) is up by about 0.3%. For a complete list of holdings, visit the AVEM Holdings page » The chart below shows the one year price performance of AVEM, versus its 200 day moving average:
Looking at the chart above, AVEM's low point in its 52 week range is $52.52 per share, with $77.97 as the 52 week high point — that compares with a last trade of $77.68. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Also see:
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Institutional Holders of CCIX
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Notable ETF Inflow Detected - AVEM, BABA, NTES, IBN

Below is Validea's guru fundamental report for ALIBABA GROUP HOLDING LTD - ADR (BABA). Of the 22 guru strategies we follow, BABA rates highest using our Growth Investor model based on the published strategy of Martin Zweig. This strategy looks for growth stocks with persistent accelerating earnings and sales growth, reasonable valuations and low debt.
ALIBABA GROUP HOLDING LTD - ADR (BABA) is a large-cap growth stock in the Retail (Specialty) industry. The rating using this strategy is 62% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of ALIBABA GROUP HOLDING LTD - ADR
More Information on Martin Zweig
About Martin Zweig: During the 15 years that it was monitored, Zweig's stock recommendation newsletter returned an average of 15.9 percent per year, during which time it was ranked number one based on risk-adjusted returns by Hulbert Financial Digest. Zweig has managed both mutual and hedge funds during his career, and he's put the fortune he's compiled to some interesting uses. He has owned what Forbes reported was the most expensive apartment in New York, a $70 million penthouse that sits atop Manhattan's Pierre Hotel, and he is a collector of all sorts of pop culture and historical memorabilia -- among his purchases are the gun used by Clint Eastwood in "Dirty Harry", a stock certificate signed by Commodore Vanderbilt, and even two old-fashioned gas pumps similar to those he'd seen at a nearby gas station while growing up in Cleveland, according to published reports.
Additional Research Links
Dividend Aristocrats 2023
High Insider Ownership Stocks
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Martin Zweig Detailed Fundamental Analysis - BABA

Alibaba's BABA aggressive pursuit of long-term growth is putting pressure on its near-term financials. In the first quarter of fiscal 2026, the company’s free cash flow turned negative at RMB 18.8 billion against a positive inflow a year earlier, as capital expenditure surged to RMB 38.7 billion. The rise reflects two capital-intensive priorities, including scaling AI and cloud infrastructure, and expanding Taobao Instant Commerce, its rapidly growing quick-commerce platform. Management reiterated a three-year RMB 380 billion ($53 billion) AI and cloud investment plan, indicating continued near-term pressure on the free cash flow.
At the Apsara 2025 Conference, the company announced plans to raise AI spending even beyond the initial budget of $53 billion, underscoring its conviction that AI represents a “generational opportunity.” Alibaba Cloud also unveiled an ambitious global expansion roadmap, including new data centers in Brazil, France and the Netherlands, with additions in Mexico, Japan, South Korea and Dubai over the coming year.
These investments are expected to support long-term growth, with Zacks forecasting revenue gains of 4.7% in fiscal 2026 and 11.3% in fiscal 2027.
However, intensifying competition from Pinduoduo, ByteDance and Huawei Cloud is keeping investment levels elevated. Despite leading China’s AI cloud market with a 35.8% share, Alibaba must continue spending heavily to defend its position amid rapid innovation and price competition.
As high capital expenditure continue before monetization gains are fully realized, Alibaba’s free cash flow is expected to stay under pressure in the coming quarters, reflecting the impacts of sustained heavy investment.
Capex Clash: Alibaba Battles Global Giants
Amazon AMZN is ramping up its capital expenditure beyond $118 billion in 2025, underscoring its ambition to dominate global AI and cloud infrastructure. Amazon’s massive spending, focused on AWS data centers and AI-driven infrastructure, marks an aggressive bid to outpace rivals. Despite potential margin pressure and rising debt, Amazon’s sustained capex reflects its determination to maintain leadership in both e-commerce logistics and hyperscale cloud computing worldwide.
Microsoft Corporation MSFT is accelerating its infrastructure expansion with more than $80 billion in planned capex for 2025, primarily targeting AI-driven data centers and Azure cloud growth. Microsoft recently pledged $30 billion to boost its U.K. AI infrastructure through 2028, reinforcing global leadership. With above 400 data centers in 70 regions, Microsoft's sustained investment further clarifies its strategy to dominate the AI and cloud landscape.
BABA’s Share Price Performance, Valuation & Estimates
BABA shares have surged 96.6% in the year-to-date period, outperforming the Zacks Internet – Commerce industry and the Zacks Retail-Wholesale sector’s growth of 6.8% and 5.8%, respectively.
BABA’s YTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, the BABA stock is currently trading at a forward 12-month price/earnings ratio of 19.74X compared with the industry’s 24.51X. BABA has a Value Score of D.
BABA’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for fiscal 2026 earnings is pegged at $6.57 per share, down 14.9% over the past 30 days, implying a 27.08% year-over-year decline.
Image Source: Zacks Investment Research
Alibaba currently has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Will Alibaba's Rising CapEx Pressure Weigh on Free Cash Flow Ahead?

Key Points
Palantir’s revenue and profits are soaring, but so are its valuations.
Alibaba’s business is stabilizing, but its stock still looks dirt cheap.
Alibaba could easily outperform Palantir and eclipse its market cap.
Palantir Technologies (NASDAQ: PLTR) has been one of the market's hottest growth stocks over the past several years. The data mining and analytics company went public five years ago via a direct listing, and its stock surged from its initial trading price of $10 to nearly $180 today.
Palantir's annual revenue surged from $1.1 billion in 2020 to $2.9 billion in 2024. It also turned profitable in 2023 and more than doubled its net income in 2024. That breakneck growth was driven by an uptick in government contracts and the rapid expansion of its commercial business.
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Prior to going public, Palantir's government-facing Gotham platform was already used by most U.S. government agencies to aggregate data from disparate sources. But after its public debut, it rapidly expanded its Foundry commercial business with similar tools for enterprise customers. From 2024 to 2027, analysts expect its revenue and earnings per share (EPS) to grow at a CAGR of 38% and 63%, respectively.
That explosive growth should be driven by geopolitical tailwinds for Gotham and the growing usage of Foundry in a more favorable macro environment. More of its clients are also building their own custom AI applications within those platforms.
Palantir's future looks bright, but it trades at over 300 times next year's earnings. With a market cap of $423 billion, it's also richly valued at 75 times next year's sales. So even if it matches analysts' expectations but trades at a lower (but still expensive) 30 times forward sales by next October, its market cap would shrink nearly 50% to $227 billion.
Even though Palantir is firing on all cylinders, investors should be wary of its meme stock valuations to avoid buying the right company at the wrong price. So instead of chasing Palantir at these levels, investors should focus on a less-popular stock with a shot at eclipsing its market cap within the next year: Alibaba (NYSE: BABA).
What happened to Alibaba?
Alibaba is China's largest e-commerce and cloud infrastructure company, but it still trades nearly 50% below its all-time high from nearly five years ago. Three headwinds drove its stock lower. First, China's antitrust regulators hit its e-commerce business with a record fine in 2021 and barred it from locking in merchants with exclusive deals, using aggressive loss-leading promotions, and expanding its retail business with unapproved acquisitions. Those restrictions eroded its defenses against its smaller competitors.
Second, China's draconian "zero-COVID" lockdowns stunted its post-pandemic recovery. Those headwinds curbed consumer spending and drove many companies to rein in their spending on its cloud infrastructure services. Lastly, the ongoing tech and trade wars between the U.S. and China drove away the bulls and compressed its valuations.
Why could Alibaba outperform Palantir?
Alibaba isn't growing as rapidly as it did before it hit those speed bumps, but its business is stabilizing. To offset the slowing growth of its Taobao and Tmall marketplaces in China, it's expanding its higher-growth overseas marketplaces -- which include Lazada in Southeast Asia, Daraz in South Asia, Trendyol in Turkey, and AliExpress for its cross-border sales. It's also opened up its Cainiao logistics platform to more third-party customers.
As for its cloud infrastructure platform, its rollout of Qwen -- its own family of large language models (LLMs) for new generative AI applications -- is locking in more customers. The broader AI boom is also driving more companies to ramp up their spending on its cloud services. Meanwhile, China's macro environment has gradually stabilized.
From fiscal 2025 (which ended this March) to fiscal 2028, analysts expect Alibaba's revenue and EPS to increase at a CAGR of 8% and 12%, respectively. It's growing much more slowly than Palantir, but it trades at just 19 times next year's earnings. With a market cap of 2.63 trillion yuan ($370 billion), it's only valued at 2.3 times next year's sales. So if the trade tensions between the U.S. and China ease, it could command a much higher valuation.
Assuming Alibaba matches analysts' expectations and trades at a more generous (but still reasonable) four times its forward sales next October, its market cap could nearly double to 5.06 trillion yuan ($710 billion). That could make it much more valuable than Palantir -- which might struggle to maintain its AI-driven meme stock valuations over the next 12 months. So while Alibaba might not be as exciting as Palantir, it's certainly a more reliable play in this choppy market.
Should you invest $1,000 in Palantir Technologies right now?
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Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Prediction: 1 Stock That Will Be Worth More Than Palantir 1 Year From Now

Alibaba Group BABA finds itself at a precarious crossroads as 2025 approaches, with its price-to-sales multiple of 2.58 times offering little comfort to investors questioning whether the Chinese e-commerce giant can recapture its former glory. While this valuation metric might appear modest compared to certain growth-oriented technology companies, the underlying fundamentals paint a troubling picture that suggests shareholders should seriously consider exiting their positions before market sentiment deteriorates further.
Disappointing Growth Trajectory Signals Structural Challenges
The Zacks Consensus Estimate for fiscal 2026 revenues is pinned at $144.68 billion, suggesting 4.73% year-over-year growth that falls dramatically short of expectations for a company once synonymous with explosive expansion in the world's second-largest economy. This tepid revenue projection reflects mounting headwinds, including intensifying domestic competition, regulatory pressures, and a broader economic slowdown in China that shows no signs of abating. Even more concerning is the anticipated earnings decline, with the Zacks Consensus Estimate for fiscal 2026 pointing toward $6.57 per share, marking a troubling 27.08% year-over-year decrease that underscores operational challenges extending beyond mere top-line stagnation.
Management's acknowledgment of persistent macroeconomic uncertainties and consumption weakness in China suggests that near-term catalysts for meaningful acceleration remain elusive.
Furthermore, recent AI initiatives, while potentially promising in the long term, require substantial capital investment during a period when profitability is already under pressure, creating an unfavorable risk-reward dynamic for shareholders seeking immediate returns. Alibaba's commitment of $52 billion over three years for AI infrastructure development reflects recognition that model innovation alone cannot drive sustainable competitive advantage. The strategic shift to self-developed AI training chips, partially replacing Nvidia hardware, addresses both cost optimization and supply chain resilience amid ongoing U.S. export restrictions. This semiconductor independence initiative, while requiring substantial upfront investment, could prove prescient as geopolitical tensions continue reshaping global technology supply chains.
Alibaba Group Holding Limited Price and Consensus
Premium Valuation Unjustified Amid Deteriorating Fundamentals
Alibaba continues to trade at a premium valuation with a Value Score of D. The market has priced in the upside of AI, while underestimating the execution risks and capital intensity required for meaningful transformation.
The stock's forward 12-month price-to-sales ratio of 2.58 times actually trades at a premium compared to the Zacks Internet-Commerce industry average of 2.23 times, exposing a troubling disconnect between market pricing and fundamental performance. This valuation premium appears entirely unjustified given Alibaba's decelerating revenue growth and contracting earnings, suggesting the market has yet to fully recalibrate expectations downward to reflect the company's diminished prospects.
BABA Trades At a Premium P/S F12M
Image Source: Zacks Investment Research
Competitive Disadvantage in AI Race Becomes Increasingly Apparent
Alibaba's stock has returned 54.1% over the past six months pales in comparison to the explosive gains captured by other companies successfully monetizing artificial intelligence capabilities. Amazon AMZN has leveraged its cloud computing dominance through AWS to establish formidable AI infrastructure advantages, while Amazon's e-commerce operations benefit from sophisticated machine learning algorithms that enhance customer experience. Microsoft MSFT has seamlessly integrated AI across its enterprise software portfolio, with Microsoft Azure becoming the preferred platform for corporate AI deployments and Microsoft's partnership with OpenAI providing unmatched access to cutting-edge large language models. Alphabet GOOGL-owned Google continues pushing boundaries in AI research and commercialization, with Google Cloud gaining market share and Google's advertising business utilizing AI for superior targeting capabilities. Each competitor appears better positioned than Alibaba to capitalize on the transformative potential of artificial intelligence, leaving the Chinese giant struggling for relevance in the technology industry's most important growth vector.
BABA’s 6-Month Performance
Image Source: Zacks Investment Research
Conclusion
Investors seeking growth should look elsewhere rather than hoping Alibaba can successfully navigate its mounting challenges while simultaneously funding an expensive AI transformation. The risk-reward profile simply doesn't justify maintaining exposure to this deteriorating situation. BABA stock currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Should Investors Hold or Fold BABA Stock at a P/S Multiple of 2.58X?

Key Points
ETF investing offers a cost-effective way to participate in the market while mitigating the risks associated with selecting individual stocks.
Vanguard stands out among fund families for its shareholder-friendly structure and industry-leading low expense ratios.
Three Vanguard funds, covering U.S. stocks, international markets, and technology, offer comprehensive exposure at minimal cost.
Exchange-traded fund (ETF) investing removes the guesswork from portfolio construction. Rather than researching dozens of companies and hoping your picks outperform, ETFs deliver instant diversification across hundreds or thousands of stocks with a single purchase. The costs stay low -- often just a few dollars per $10,000 invested each year -- and ETFs eliminate the mistakes that hurt individual stock pickers who panic during market drops or chase hot stocks at the wrong time.
Among fund families, Vanguard deserves special attention. Fund investors actually own the management company itself, which means Vanguard works for shareholders instead of outside profit-seekers. This setup keeps costs far below what most competitors charge. Lower costs mean more money stays in your account, and those savings add up to significantly higher returns over decades.
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Three Vanguard ETFs stand out as core holdings for investors building wealth over time. Here's a brief overview of each fund and how it may fit into a well-diversified portfolio.
The everything U.S. stock fund
Vanguard Total Stock Market ETF (NYSEMKT: VTI) tracks nearly 100% of the investable U.S. equity market through ownership of roughly 3,500 stocks spanning large-cap giants down to tiny specialists. The fund captures the full range of American business -- from Nvidia powering the artificial intelligence (AI) revolution at 6.5% of assets to small regional banks and industrial firms that barely move the needle individually but collectively represent substantial economic activity.
The Vanguard Total Stock Market ETF sports an expense ratio of just 0.03% annually while delivering a 1.11% annualized yield and 14.7% average returns over the past 10 years. That outstanding performance reflects the advantage of owning everything rather than trying to pick winners.
Furthermore, the fund automatically adjusts as companies grow or shrink, ensuring Microsoft and Apple earn their positions through market performance rather than manager guesswork. For investors seeking one fund that covers the entire U.S. market, the Vanguard Total Stock Market ETF delivers complete coverage at rock-bottom cost.
The global diversification play
Vanguard Total International Stock ETF (NASDAQ: VXUS) covers what U.S.-only portfolios miss. The fund holds over 8,600 stocks from developed and emerging markets outside the U.S., creating exposure to economies and industries where American companies operate less.
Top holdings include Taiwan Semiconductor Manufacturing at 2.46% -- the world's leading chip manufacturer -- along with Chinese tech giants Tencent and Alibaba, European leaders like ASML and SAP, and thousands of mid-sized firms across Asia, Europe, and Latin America.
The Vanguard Total International Stock ETF costs just 0.05% per year, delivers a 2.78% yield that runs well above most domestic funds, and has posted 8.4% average annual returns over the past 10 years. International stocks have trailed U.S. returns recently, but these markets trade at cheaper prices and offer diversification benefits when domestic momentum eventually reverses.
The fund's massive holding count prevents too much concentration in any single company, while the higher yield provides current income that can be reinvested or spent. For portfolios weighted too heavily toward U.S. stocks, this fund provides geographic balance.
The technology concentration play
Vanguard Information Technology ETF (NYSEMKT: VGT) narrows its focus to the main sector driving market returns -- technology. The fund holds roughly 316 stocks classified under information technology -- software, hardware, semiconductors, and IT services -- with Nvidia, Microsoft, and Apple combining for about 44% of total assets. That concentration creates higher ups and downs but also captures the ongoing shift toward digital infrastructure, AI, and cloud computing that defines modern economic growth.
The Vanguard Information Technology ETF charges 0.09% annually, yields just 0.4% as tech companies reinvest cash into growth rather than paying dividends, and has delivered exceptional 23.4% average annual returns over the past 10 years. That performance reflects tech dominance -- technology now makes up roughly 30% of the benchmark S&P 500, and this fund provides pure exposure without watering it down with utilities or consumer staples.
The risk comes from concentration. When tech sells off, this fund falls harder than diversified alternatives. But for investors who believe software continues taking over more industries and AI represents real change rather than hype, this fund offers direct access to the companies building that future.
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George Budwell has positions in Apple, Microsoft, Nvidia, Taiwan Semiconductor Manufacturing, and Vanguard Information Technology ETF. The Motley Fool has positions in and recommends ASML, Apple, Microsoft, Nvidia, Taiwan Semiconductor Manufacturing, Tencent, Vanguard Total International Stock ETF, and Vanguard Total Stock Market ETF. The Motley Fool recommends Alibaba Group and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

3 Top Vanguard ETFs to Buy Right Now

Baidu BIDU has surged 42.3% year to date, outperforming the Zacks Internet-Services industry and the Zacks Computer and Technology sector, which have advanced 28.9% and 22.9%, respectively. The rally reflects renewed investor confidence in Baidu’s accelerating AI Cloud growth, expanding global footprint of its autonomous driving platform Apollo Go and steady progress in applying generative AI across its ecosystem. As the company advances these initiatives amid intensifying competition, investors face a key question: should they add exposure now or wait for a more attractive entry point ahead? Let's delve deeper to find out.
BIDU’s YTD Performance
Image Source: Zacks Investment Research
Apollo Go’s Global Expansion Adds Strategic Optionality
Baidu’s autonomous driving arm, Apollo Go, has emerged as a central pillar of the company’s long-term growth strategy. The platform has now surpassed 14 million cumulative rides, reflecting triple-digit year-over-year growth and reinforcing Baidu’s leadership in China’s autonomous mobility landscape. Strategic partnerships with Uber and Lyft mark the beginning of a global rollout across Asia, the Middle East and Europe, enabling Baidu to scale through established ride-hailing networks while maintaining an asset-light model that limits capital intensity.
Operational breakeven in early domestic markets highlights the strength of Apollo Go’s economics, particularly as expansion moves toward higher-fare international cities. The purpose-built RT6 vehicle — engineered for Level 4 autonomy and among the lowest-cost production models in its class — provides a durable cost advantage that should widen as fleet deployment increases. With active right-hand-drive testing in Hong Kong and new operations in Dubai and Abu Dhabi, Baidu is extending its technological leadership into more complex traffic environments.
Competition in autonomous mobility is intensifying globally, with Tesla TSLA advancing its Full Self-Driving system and pursuing wider commercial deployment. However, Baidu’s Apollo Go already operates fully driverless fleets across multiple Chinese cities under regulatory approval, underscoring a clear execution lead in large-scale autonomy. As regulatory frameworks mature worldwide, Apollo Go offers Baidu a differentiated, potentially multibillion-dollar growth engine that extends well beyond its legacy advertising business.
Baidu's AI Advancement Creates Bright Growth Prospects
Baidu’s accelerating artificial intelligence capabilities continue to shape its long-term growth narrative. BIDU’s ERNIE 4.5 foundation models and Qianfan Cloud platform form the backbone of its AI ecosystem, offering enterprises an end-to-end suite for model training, deployment and application development. Qianfan’s expanding model library, which includes Baidu’s open-sourced ERNIE models and third-party multimodal systems, is enhancing flexibility across enterprise use cases while improving inference efficiency and cost performance.
Baidu’s AI Cloud has maintained its leadership position as China’s top-ranked AI cloud provider for the sixth consecutive year, supported by its four-layer architecture that integrates infrastructure, frameworks, models and applications. The platform’s growing suite of AI tools — including Comate, an AI coding assistant and Miaoda, a no-code development platform — continues to expand developer adoption and strengthen the company’s ecosystem reach.
While Baidu remains well-positioned in AI infrastructure, continued reinvestment is expected to keep margins and free cash flow under pressure in the near term. Sustaining leadership will hinge on the faster commercialisation of AI Search and Qianfan Cloud, alongside demonstrating that heavy upfront spending can evolve into scalable, recurring revenue over time.
Valuation Discount Provides Margin of Safety
Baidu trades at a forward P/E of 14.82X, representing a 38% discount to the sub-industry average of 23.98X and nearly 50% below the sector multiple of 29.24X, indicating that the market may still be undervaluing the company’s long-term AI potential and growing exposure to autonomous mobility.
Baidu’s Valuation
Image Source: Zacks Investment Research
This valuation gap stands out when compared with its peers. Alibaba BABA trades at 18.51X forward earnings, while Tencent TCEHY commands an even higher 21.16X multiple, both reflecting premium valuations as they expand into enterprise AI and digital services. The contrast is further underscored by Tesla’s 190.03X multiple, which captures global investor optimism for autonomous and AI-driven mobility, whereas Baidu’s fully driverless operations remain more conservatively priced despite clear progress in commercialisation.
The discount largely reflects investor caution around Baidu’s advertising slowdown and uneven cash flows amid heavy AI reinvestment. Yet the company’s net cash position of RMB 155.1 billion as of June 30, 2025, provides ample flexibility to sustain innovation while maintaining financial stability. In the second quarter of 2025, non-online marketing revenue surpassed RMB 10 billion, up 34% year over year, supported by 27% growth in AI Cloud to RMB 6.5 billion, signaling accelerating diversification and a steady shift toward higher-quality, recurring revenue streams over time.
However, the Zacks Consensus Estimate for third-quarter 2025 revenues is pegged at $4.34 billion, indicating a 9.33% year-over-year decline. The consensus mark for earnings per share is pegged at $1.32, down a penny over the past 30 days and implying a 44.30% year-over-year decline. These figures highlight how intensifying competition and slower AI monetization are weighing on near-term performance visibility, particularly as Alibaba and Tencent continue expanding their AI-led platforms and enterprise partnerships, reinforcing their ecosystem advantage over smaller players.
Baidu, Inc. Price and Consensus
Conclusion
Baidu’s accelerating investments in artificial intelligence, cloud infrastructure and autonomous driving are laying the foundation for its next growth phase. Apollo Go’s expanding international presence, the continued scaling of Qianfan Cloud and the evolution of its ERNIE foundation models position the company at the centre of China’s AI ecosystem. However, slower monetisation and ongoing reinvestment are likely to keep near-term profitability constrained.
At current levels, Baidu’s valuation already reflects much of the optimism surrounding its transformation, yet still trades at a meaningful discount to peers such as Alibaba, Tesla and Tencent. This combination of structural progress and conservative pricing supports a measured approach. Prudent investors may prefer to hold existing positions and new investors should wait for a more attractive entry point as clearer catalysts for AI commercialisation and margin recovery emerge.
BIDU stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
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3 Reasons to Hold BIDU Stock Now Despite a 42.3% Year-to-Date Rally

Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Global X Artificial Intelligence & Technology ETF (Symbol: AIQ) where we have detected an approximate $242.6 million dollar inflow -- that's a 3.9% increase week over week in outstanding units (from 123,940,002 to 128,810,002). Among the largest underlying components of AIQ, in trading today Alibaba Group Holding Ltd (Symbol: BABA) is up about 2.6%, Tesla Inc (Symbol: TSLA) is up about 1.8%, and Palantir Technologies Inc (Symbol: PLTR) is up by about 2.1%. For a complete list of holdings, visit the AIQ Holdings page » The chart below shows the one year price performance of AIQ, versus its 200 day moving average:
Looking at the chart above, AIQ's low point in its 52 week range is $30.60 per share, with $51.58 as the 52 week high point — that compares with a last trade of $50.87. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Also see:
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

AIQ, BABA, TSLA, PLTR: ETF Inflow Alert

Here are three stocks added to the Zacks Rank #5 (Strong Sell) List today:
Adherex Technologies FENC is a clinical-stage biotechnology company which is focused on the development of Sodium Thiosulfate for the prevention of ototoxicity from cisplatin in pediatric patients. The Zacks Consensus Estimate for its current year earnings has been revised almost 55.6 downward over the last 60 days.
Alibaba BABA is one of the leading e-commerce giants in China. The Zacks Consensus Estimate for its current year earnings has been revised almost 16.8% downward over the last 60 days.
Alico ALCO is involved in various operations and activities including citrus fruit production, cattle ranching, sugarcane and sod production, and forestry. The Zacks Consensus Estimate for its current year earnings has been revised 5.8% downward over the last 60 days.
View the entire Zacks Rank #5 List.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners Up
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Alico, Inc. (ALCO) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Alibaba Group Holding Limited

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