On my latest DCA, I added more $BABA (-0,12%) because the stock is now trading below my average cost basis. That kind of weakness is exactly when I want to size in, not out.
Alibaba is one of the most important company of the Chinese market, and in my view it still makes sense to keep it as a counterweight in a portfolio that already has a lot of U.S. exposure. The market may be pricing in too much fear, while the long-term optionality is still there.
The setup is not perfect, and that is the point. Free cash flow has been under pressure because Alibaba is spending heavily on AI, cloud infrastructure, and strategic bets in quick commerce, which compressed margins and pushed down FY2026 free cash flow.
So yes, free cash flow is weaker right now. But that weakness is tied to investment, not to a broken business model. If Alibaba executes on AI and cloud the way management is aiming to, this could look cheap.
For me, this is a big buy because the numbers matter: depressed valuation, real revenue growth, solid EPS base, and a strategic AI spend cycle that could create a stronger earnings profile later.
$BABA (-0,12%) is approaching a key technical area where wave 2 appears to be completing around the 0.618 Fibonacci retracement and the 200-week moving average. If this base holds, the next leg higher could point to a wave 3 extension toward 1.618, which in this framework lines up with the old all-time high around $320. The chart also shows a bullish cup-and-handle structure, which makes the technical case more interesting while fundamentals stay intact.
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