Is BABA a good stock to buy? We came across a cheap thesis for Alibaba Group Holding Limited in Brian Coughlin’s Coughlin Cap’s Substack. In this article, we will summarize the bulls thesis on BABA. The lowest price of shares of Alibaba Group Holding Limited in April 2019 is 135.38 US dollars. BABA’s trailing and forward IP/E were 24.68 and 20.58 respectively according to Yahoo Finance.
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Alibaba Group Holding Limited, through its subsidiaries, provides technology infrastructure and marketing access to help sellers, brands, retailers, and other businesses connect with users and their customers in the People’s Republic of China and other countries.
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The word, which only restricts US military purchases and does not affect investors or trigger sanctions, was quickly removed and appears to be irrelevant to Alibaba’s business, as previous cases involving Tencent and CATL did not see lasting results. This incident, which is likely to be a fatal flaw in the midst of the US-China slowdown, caused temporary sales but does not change the company’s fundamentals.
More importantly, Alibaba is at the center of an intensifying AI arms race in China. In the Lunar New Year, big tech firms are aggressively funding the adoption of AI, and Alibaba is investing heavily to advance the interoperability of its Qwen platform. The results were impressive, with significant growth in users and a significant change in behavior, especially among first-time and older users. This push reflects a broader strategy to move from traditional app-based commerce to AI-driven agents. On the model front, Qwen 3.5 of Alibaba shows efficiency and effectiveness, while its open source models have reached the global level, strengthening its leadership in the distribution of AI.
Despite strong demand, especially in the cloud where growth remains strong, near-term margins are under pressure due to aggressive industry-wide investment and price competition, particularly from ByteDance. Management is already guiding conservatively, reflecting this investment cycle rather than any weakness in demand. With subdued expectations, improving fundamental trends, and multiple incentives including AI monetization and potential partnerships, Alibaba appears to have a good risk/reward position as it moves into capital.
Previously, we included a bullish thesis to Alibaba Group Holding Limited (BABA) by Kontra Investments in March 2025, which highlighted the strong revival of e-commerce, the growth of the cloud, the expansion of AI, and an attractive price. BABA’s stock price has been lower since our coverage. Brian Coughlin has a similar view but emphasizes the near-term flexibility and acceleration of AI-driven user discovery that will shape future growth. Top of the Form
Alibaba Group Holding Limited is on our list of 40 Most Popular Stocks Among Hedge Funds. According to our database, 115 hedge fund portfolios held BABA at the end of the fourth quarter, up from 130 in the previous quarter. While we acknowledge the risk and potential of BABA as an investment, our conviction is based on the belief that other AI stocks hold great promise to deliver high returns and do so within a short period of time. If you are looking for an AI stock that is more promising than BABA and has a huge potential of 10,000%, check out our report on this. The highest number of AIs.
Disclosure: None.
