Alibaba: The Value Trap Disguised as the Deal of the Century?
It’s the contrarian bet everyone loves to hate. With billionaires like Michael Burry and David Tepper piling in, Alibaba looks like a screaming bargain. But beneath the massive buybacks and the 'AI pivot' rhetoric lies a simpler, uglier truth: the strategic repositioning might just be a high-tech surrender.
If you look strictly at the numbers, you’d be forgiven for thinking the market has lost its mind. Alibaba (BABA) trading at a forward P/E ratio barely scraping double digits? A company sitting on a cash pile that rivals the GDP of a small nation, priced as if it’s going out of business? It feels like 2009 all over again, and the “smart money” is screaming buy.
But before you follow the 13F filings of the hedge fund elite (looking at you, Appaloosa and Scion), take a breath. The narrative of Alibaba’s “strategic repositioning”—switching from an unwieldy conglomerate to an agile, AI-first holding company—glosses over the structural wall it has just hit at full speed.
The "Cheap" Mirage
Value investors love a low multiple. It feels safe. It screams "margin of safety." But in tech, a low multiple is often the first symptom of a terminal illness. Alibaba isn't just cheap because of "sentiment"; it's cheap because its growth engine has seized up.
While management talks about stabilizing the core commerce business, the reality in the trenches is a bloodbath. PDD Holdings (Temu/Pinduoduo) isn't just nibbling at Alibaba's market share; it's swallowing it whole. PDD is growing revenues at triple-digit rates while Alibaba celebrates "stabilization" (read: barely flat). You aren't buying a recovery play; you're buying a legacy incumbent fighting a defensive war.
| Metric (Est.) | Alibaba (BABA) | PDD Holdings (PDD) |
|---|---|---|
| Revenue Growth | Single Digits (~5-8%) | Triple/Double Digits (>60%) |
| Forward P/E | ~10x (Value Trap?) | ~12-15x (Growth at discount) |
| Key Narrative | "Capital Return" (Buybacks) | "Aggressive Expansion" |
The Cloud IPO Cancellation: A Forced Hand
The most telling moment of the last year wasn't a earnings beat; it was the abrupt cancellation of the Cloud Intelligence Group's IPO. The official line? "Market conditions." The skeptical translation? Chip bans.
You cannot build a high-growth cloud business to rival AWS or Azure when you are legally cut off from the Nvidia chips required to power it. The pivot to "AI-driven" internal efficiency is essentially management admitting that the external growth avenue is blocked by Washington. This isn't a strategic choice; it's geopolitical containment in action.
👀 Why are the billionaires buying then?
The Verdict
Alibaba is repositioning itself as a high-yield utility company—a cash cow that pays dividends and buys back stock because it has run out of places to grow. That's fine for a defensive portfolio. But for anyone betting on the "recovery of the Chinese digital economy," BABA might be the wrong horse. The recovery is happening, but it’s happening on Pinduoduo’s app, not Jack Ma’s legacy.
L'argent ne dort jamais, et moi non plus. Je dissèque les marchés financiers au scalpel. Rentabilité garantie de l'info. L'inflation n'a aucun secret pour moi.
