Nasdaq BABA Alibaba

Despite its muted forecast for full-year earnings, I am bullish on Chinese e-commerce giant Alibaba (BABA). Warren Buffett famously said, "Be fearful when others are greedy and be greedy when others are fearful." The adage is true for several stocks out there. But Alibaba is perhaps the greatest example in the market right now.

The e-commerce giant is not having the best time as of late. Regulators in Beijing are sharpening their knives, and many large conglomerates are feeling the pinch. Alibaba is no different. Chinese regulators fined the company $2.8 billion for abusing its market dominance. It is important to note that the fine amounts to about 4% of its 2019 domestic revenue.

The slowdown of the Chinese economy is also weighing down sentiment. The company forecast that its annual revenue growth will slow down to a crawl this year, the worst since its listing in 2014.

Hence, BABA stock is taking a pasting these days. However, the fact that shares are trading at rock bottom prices right now means that there is the potential for opportunity. Alibaba is still head and shoulders above the other e-commerce companies active in its region.

Often referred to as the "Amazon of China," operating metrics are generally rock solid. For those looking for a solid tech stock during the holiday season, look no further than BABA.

China's Growth Forecast Is Impacting Alibaba Stock

China's slowing economy has impacted consumption. There are multiple reasons why this is happening. First, China is employing a zero-COVID strategy. Although many countries in Asia have decided to live with the virus, China persists in this rigorous approach. The preparedness process includes strict lockdowns, even after just one or handfuls of cases have been detected. Naturally, it leads to a slowdown in the economy.

Additionally, the energy crisis in China is just one example of how the world's supply can be disrupted by high costs for coal and inflexible electricity prices. Due to the energy shortages, local governments enforce rolling blackouts, which primarily affect industries like steelmaking or manufacturing chemicals.

Finally, Evergrande, one of China's largest property developers, and its debt burden is still big news. Beijing is trying to deleverage the sector and pacify fears. However, panic has spread to other Chinese companies as they also halt or delay payments.

These factors are combined to create a tailspin for the Chinese economy. It grew at just 4.9% in Q3, a steep drop sequentially from the 7.9% expansion in the second quarter. Hence, Chinese companies are feeling the pinch due to a strained economic forecast, and Alibaba stock is no exception.

Quarterly Results Underscore Larger Issues

Over the years, Alibaba has cultivated a reputation as a solid performer. However, its recent quarterly earnings represent a rare misstep. In the BABA earnings release, the e-commerce juggernaut posted Q2 revenue of 200.69 billion yuan ($31.4 billion), representing year-over-year growth of 29%. EPS came in at 11.20 yuan, a 38% dip from the year-ago period. Both revenue and EPS figures missed estimates.

Customer Management Revenue, or CMR, is the company's bread and butter. That segment, in particular, is struggling. Revenues from this area rose just 3% from the year-ago period.

A bright spot, though, is Cloud Computing. Investors are closely monitoring this area. The segment has been on a tear, jumping 33% to make up 20 billion yuan in revenue. This year's EBITA was 396 million yuan versus a 567 million yuan loss last year, proving that the company is turning things around. Moving forward, the growth of this segment will become a lynchpin of the company's overall strategy.

As highlighted in the earlier section, the Chinese economic slowdown affects BABA. However, the other major issue is Chinese regulatory concern. The Chinese government is clamping down on the domestic technology industry. Antitrust and data protection are taking center stage.

For years, Chinese tech giants grew unabated. However, Beijing now wants to regulate the behavior of the domestic technology industry. The fine of $2.8 billion in April becomes understandable in this context.

Looking ahead, BABA cut its revenue guidance for Fiscal Year 2022. Previously, the company had forecast 930 billion yuan, a year-over-year jump of 29.5%. However, now it expects much more conservative revenue growth within the range of 20% to 23%.

Management Shuffle

In light of slowing performance, Alibaba is looking to shake things up. Hence, longtime finance chief Maggie Wu is stepping down from her position. Deputy CFO Toby Xu will be the main CFO starting in April 2022.

In a press release, Wu cited her retirement as the "culmination of extensive preparation over many years" and said it would allow new blood injection into the management circle.

Alibaba is creating two new divisions — International Digital Commerce and China Digital Commerce. The change is aimed to reverse slowing growth and create a clearer path to growth and value creation. The international business division will manage the company's operations in Europe, South America, and Southeast Asia, among other places.

Alibaba has tapped 36-year old executive Jiang Fan to lead its overseas division. Meanwhile, Trudy Dai will take care of the domestic e-commerce business operations. Jiang led Taobao's push into mobile and was seen as a contender to take the reins of Alibaba Group until he became embroiled in a personal scandal last year.

AMZN Forecast Versus Alibaba

The two biggest companies in e-commerce are Amazon (AMZN) and Alibaba. The fight for global leadership has been a long one. The two companies have been going head-to-head as they both strive to become the world's leading online retailers.

Amazon launched in 1995, whereas Alibaba started up less than five years later. The former has taken over American retail, while Alibaba rules China's e-commerce market.

However, the business models of Amazon and Alibaba couldn't be more different, with the former being an e-commerce company while the latter is operating as either a retail site or auction house.

You cannot go wrong investing in either one. But at the moment, Alibaba is the better stock. The AMZN forecast doesn't call for much upside. In comparison, due to the issues BABA faces domestically, this one is trading at a huge discount.

Wall Street's Take

The sentiment for Alibaba on Wall Street is turning bullish. The stock has a Strong Buy consensus rating, based on 20 Buys and three Holds assigned in the past three months. The average Alibaba stock forecast of $203.05 implies 76.9% upside potential.

Alibaba Stock Forecast Implies Huge Upside Potential

Understandably, BABA has seen better times. Alibaba is still investing heavily in new business lines as its core e-commerce business peaks and profitability slows.

If things stabilize next year, then BABA stockholders will be laughing all the way to the bank. According to Goldman Sachs, the Alibaba Group is the largest e-commerce player in China, with an estimated 69% market share for 2020.

Considering its history and size, Alibaba is a value play at the moment. Much of what is happening with the company has nothing to do with its operations. Instead, you can chalk most of that up to the intense regulatory environment in China. Nevertheless, the Alibaba stock forecast is solid. The fact that shares are available at a discount is more than enough reason to consider it.

Disclosure: At the time of publication, Faizan Farooque did not have a position in any securities mentioned in this article.

​Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates.  Read full disclaimer >

Despite its muted forecast for full-year earnings, I am bullish on Chinese e-commerce giant Alibaba (BABA). Warren Buffett famously said, "Be fearful when others are greedy and be greedy when others are fearful." The adage is true for several stocks out there. But Alibaba is perhaps the greatest example in the market right now.

The e-commerce giant is not having the best time as of late. Regulators in Beijing are sharpening their knives, and many large conglomerates are feeling the pinch. Alibaba is no different. Chinese regulators fined the company $2.8 billion for abusing its market dominance. It is important to note that the fine amounts to about 4% of its 2019 domestic revenue.

The slowdown of the Chinese economy is also weighing down sentiment. The company forecast that its annual revenue growth will slow down to a crawl this year, the worst since its listing in 2014.

Hence, BABA stock is taking a pasting these days. However, the fact that shares are trading at rock bottom prices right now means that there is the potential for opportunity. Alibaba is still head and shoulders above the other e-commerce companies active in its region.

Often referred to as the "Amazon of China," operating metrics are generally rock solid. For those looking for a solid tech stock during the holiday season, look no further than BABA.

China's Growth Forecast Is Impacting Alibaba Stock

China's slowing economy has impacted consumption. There are multiple reasons why this is happening. First, China is employing a zero-COVID strategy. Although many countries in Asia have decided to live with the virus, China persists in this rigorous approach. The preparedness process includes strict lockdowns, even after just one or handfuls of cases have been detected. Naturally, it leads to a slowdown in the economy.

Additionally, the energy crisis in China is just one example of how the world's supply can be disrupted by high costs for coal and inflexible electricity prices. Due to the energy shortages, local governments enforce rolling blackouts, which primarily affect industries like steelmaking or manufacturing chemicals.

Finally, Evergrande, one of China's largest property developers, and its debt burden is still big news. Beijing is trying to deleverage the sector and pacify fears. However, panic has spread to other Chinese companies as they also halt or delay payments.

These factors are combined to create a tailspin for the Chinese economy. It grew at just 4.9% in Q3, a steep drop sequentially from the 7.9% expansion in the second quarter. Hence, Chinese companies are feeling the pinch due to a strained economic forecast, and Alibaba stock is no exception.

Quarterly Results Underscore Larger Issues

Over the years, Alibaba has cultivated a reputation as a solid performer. However, its recent quarterly earnings represent a rare misstep. The e-commerce juggernaut posted Q2 revenue of 200.69 billion yuan ($31.4 billion), representing year-over-year growth of 29%. EPS came in at 11.20 yuan, a 38% dip from the year-ago period. Both revenue and EPS figures missed estimates.

Customer Management Revenue, or CMR, is the company's bread and butter. That segment, in particular, is struggling. Revenues from this area rose just 3% from the year-ago period.

A bright spot, though, is Cloud Computing. Investors are closely monitoring this area. The segment has been on a tear, jumping 33% to make up 20 billion yuan in revenue. This year's EBITA was 396 million yuan versus a 567 million yuan loss last year, proving that the company is turning things around. Moving forward, the growth of this segment will become a lynchpin of the company's overall strategy.

As highlighted in the earlier section, the Chinese economic slowdown affects BABA. However, the other major issue is Chinese regulatory concern. The Chinese government is clamping down on the domestic technology industry. Antitrust and data protection are taking center stage.

For years, Chinese tech giants grew unabated. However, Beijing now wants to regulate the behavior of the domestic technology industry. The fine of $2.8 billion in April becomes understandable in this context.

Looking ahead, BABA cut its revenue guidance for Fiscal Year 2022. Previously, the company had forecast 930 billion yuan, a year-over-year jump of 29.5%. However, now it expects much more conservative revenue growth within the range of 20% to 23%.

Management Shuffle

In light of slowing performance, Alibaba is looking to shake things up. Hence, longtime finance chief Maggie Wu is stepping down from her position. Deputy CFO Toby Xu will be the main CFO starting in April 2022.

In a press release, Wu cited her retirement as the "culmination of extensive preparation over many years" and said it would allow new blood injection into the management circle.

Alibaba is creating two new divisions — International Digital Commerce and China Digital Commerce. The change is aimed to reverse slowing growth and create a clearer path to growth and value creation. The international business division will manage the company's operations in Europe, South America, and Southeast Asia, among other places.

Alibaba has tapped 36-year old executive Jiang Fan to lead its overseas division. Meanwhile, Trudy Dai will take care of the domestic e-commerce business operations. Jiang led Taobao's push into mobile and was seen as a contender to take the reins of Alibaba Group until he became embroiled in a personal scandal last year.

AMZN Forecast Versus Alibaba

The two biggest companies in e-commerce are Amazon (AMZN) and Alibaba. The fight for global leadership has been a long one. The two companies have been going head-to-head as they both strive to become the world's leading online retailers.

Amazon launched in 1995, whereas Alibaba started up less than five years later. The former has taken over American retail, while Alibaba rules China's e-commerce market.

However, the business models of Amazon and Alibaba couldn't be more different, with the former being an e-commerce company while the latter is operating as either a retail site or auction house.

You cannot go wrong investing in either one. But at the moment, Alibaba is the better stock. The AMZN forecast doesn't call for much upside. In comparison, due to the issues BABA faces domestically, this one is trading at a huge discount.

Wall Street's Take

The sentiment for Alibaba on Wall Street is turning bullish. The stock has a Strong Buy consensus rating, based on 20 Buys and three Holds assigned in the past three months. The average Alibaba stock forecast of $203.05 implies 76.9% upside potential.

Alibaba Stock Forecast Implies Huge Upside Potential

Understandably, BABA has seen better times. Alibaba is still investing heavily in new business lines as its core e-commerce business peaks and profitability slows.

If things stabilize next year, then BABA stockholders will be laughing all the way to the bank. According to Goldman Sachs, the Alibaba Group is the largest e-commerce player in China, with an estimated 69% market share for 2020.

Considering its history and size, Alibaba is a value play at the moment. Much of what is happening with the company has nothing to do with its operations. Instead, you can chalk most of that up to the intense regulatory environment in China. Nevertheless, the Alibaba stock forecast is solid. The fact that shares are available at a discount is more than enough reason to consider it.

Disclosure: At the time of publication, Faizan Farooque did not have a position in any securities mentioned in this article.

​Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates.  Read full disclaimer >

Today, December 28, 2021, among the underlying components of the NYSE American, we saw unusual or noteworthy options trading volume and activity in Senseonics Holdings, Inc. (SENS), which opened at $2.83.

Some of the major indexes might be near all-time highs, but many highly valued and high-growth stocks have fallen substantially over the past six months. With the majority of these stocks, nothing is wrong with them, and that leaves an optimal opportunity to buy some beaten-down

JD.com (NASDAQ: JD), the largest direct retailer in China, lost more than 20% of its stock value this year as regulatory headwinds rattled Chinese tech stocks. However, JD still fared much better than its chief e-commerce competitors Alibaba (NYSE: BABA) and Pinduoduo (NASDAQ: PD

The world was already hurtling toward e-commerce accounting for a greater percentage of total retail sales before the pandemic struck, and now it is climbing at an inexorable rate.

ContextLogic (NASDAQ: WISH), the parent company of the e-commerce platform Wish, went public at $24 per share last December. But the stock is only worth about $3.50 today, due to ongoing concerns about its decelerating growth, loss of monthly active users (MAUs), and lack of prof

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

Alibaba Group's (NYSE: BABA) Taobao, along with four other e-commerce platforms, including  Pinduoduo (NASDAQ: PDD), and JD.com (NASDAQ: JD), has been summoned by a consumer protection organization in China's Zhejiang Province, Reuters reported. 

According to the source, the companies were summoned due to live-streaming irregularities during the Singles' Day shopping festival. Notably, ByteDance's Douyin, the Chinese version of TikTok, and the video-sharing mobile app Kuaishou were also summoned. 

Reasons Behind Summon 

According to the consumer protection organization, around 30% of live-streamers showed irregularities during the Singles' Day festival, while almost 40% of the products sold during the event did not meet national standards. 

Additionally, the Cyberspace Administration of China (CAC) revealed that online platforms, including social media networks and video-sharing sites, will be thoroughly scrutinized to reduce deception on the internet.

Wall Street’s Take 

Recently, Daiwa analyst John Choi reiterated a Buy rating on Alibaba but lowered the price target to $170 (43.27% upside potential) from $195. 

Consensus among analysts is a Strong Buy based on 22 Buys versus 3 Holds. The average Alibaba price target of $203.65 implies 71.62% upside potential from current levels. However, shares have lost 46.6% over the past year. 

Website Traffic 

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (NYSE: SEMR), the world’s biggest website usage monitoring service, offers insight into Alibaba’s performance this quarter. According to the tool, the Alibaba website recorded a 10.13% decrease in global visits in November compared to the same period last year. Also, a quarter-to-date comparison showed a decline of 3.76% compared to Q3 2021, while year-to-date website traffic growth stands at 1.67%. 

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Alibaba Group Holding Limited (NYSE:BABA) received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$178 at one point, and dropping to the lows of US$112. Some share price movements can give investors a better opportu

Initial public offerings (IPOs) around the world raised a record $594 billion in 2021, riding the coattails of stock market rallies, yet often disappointing investors with their subsequent stock performance.

2021 is the year that Alibaba (NYSE:BABA) shareholders would like to forget. This Chinese tech giant’s ADR (American Depositary Receipt) continues to trend lower, crafting lower lows. 

It’s worth noting that Alibaba’s ADR has lost about 49% of its value year-to-date. Moreover, it is down over 53% over the past year.

Moderation in its growth rate due to the macroeconomic slowdown and intensifying competition weighed on Alibaba stock. Furthermore, heightened regulatory concerns led investors to dump Chinese tech stocks. 

What to Expect Now?

The weak macroeconomic conditions and increased competitive activity prompted management to lower its full-year sales growth target. Alibaba now expects revenues to increase by 20-23% in FY22, lower than its earlier growth forecast of 30%. 

Notably, investor and hedge fund sentiment remains negative about Alibaba stock. TipRanks’ Stock Investors tool shows that 5.9% of investors holding portfolios on TipRanks cut their exposure to Alibaba stock in the past month. 

Further, TipRanks’ Hedge Fund Trading Activity tool shows hedge funds sold 1.1 million Alibaba shares in the last three months.

Citing the competitive landscape, John Choi of Daiwa lowered his price target on Alibaba stock to $170 from $195. However, Choi has a Buy rating on Alibaba. 

Along with Choi, Elinor Leung of CLSA maintained a Buy rating on Alibaba stock. Leung views Alibaba’s valuation as “Cheap.” Further, the analyst sees its cloud offerings as the next growth catalyst. 

It’s worth noting that Alibaba’s cloud computing revenues increased by 33% during the last reported quarter. Alibaba’s proprietary cloud technology and investments in new product offerings augur well for growth. 

Wall Street’s Take

Besides Choi and Leung, the majority of analysts maintain a bullish view about BABA stock. On TipRanks, Alibaba sports a Strong Buy consensus rating based on 22 Buy and 3 Hold recommendations. 

Further, due to the recent selling, Alibaba's stock forecast and price targets on TipRanks show solid upside potential. The average Alibaba price target of $203.65 indicates 71.6% upside potential to current levels.

Disclosure: On the date of publication, Amit Singh had no position in any of the companies discussed in this article.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates  Read full disclaimer >

Here’s a sad investing story for 2021 in one word: Alibaba (BABA).

There’s no way around it, investors have endured a torrid time. The negatives have kept on piling up; from lackluster earnings to a slowing Chinese economy to regulatory uncertainty, and the result has been year-to-date share losses of a depressing 49%. Or as Truist’s top Youssef Squali puts it, it is “the worst mega cap in our coverage universe.”

However, last week the ecommerce giant hosted its annual Investor Day (which took place over 2 days), and Squali came away confident Alibaba wants to put things right so to “rebuild shareholder value.” Whilst recognizing that “macro, competition and regulatory hurdles abound,” the 5-star analyst came away “impressed by the massive opportunity for BABA in China/SE Asia.”

So, what did Squali particularly like?

Well, in a funny sort of way, Squali was glad to learn of the “magnitude of losses on emerging initiatives including Local, Taobao Deals, Taocaicai and International.” More to the point, what Squali liked was to be provided with details of revenues and profitability per segment. And those – for now – losing initiatives also shone a light on the “sustained healthy margin of the more mature, China Commerce core business.”

Those losing initiatives form part of the huge investment cycle the company is undertaking and two segments which were in investment mode for the last several years - Cloud and Cainiao – are starting to reap the rewards with both now “virtually at profitability.”

Importantly, Squali says, management is also showing a willingness to recognize the “potential of creating value by raising external capital for money-losing units.” This will not only help reduce the “investment pressure” on the group's margins but will also “capture the valuation disparity between its subsidiaries and public peers.”

Squali cites Trendyol, the company's Turkish ecommerce business unit, as an example of this strategy. Trendyol raised $1.5 billion in a private placement led by Softbank giving the company a $16.5 billion valuation. There was also talk of separately listing certain units. Squali thinks Cainiao and Lazada are two businesses that could “materially benefit from such a strategy.”

To this end, Squali rates BABA stock a Buy and has a $200 price target for the shares. Investors stand to pocket a 68% gain, should all go according to plan over the next 12 months. (To watch Squali’s track record, click here)

Most analysts remain on BABA’s side; barring 3 Holds, all 22 other ratings are positive, making for a Strong Buy consensus rating. Following this year’s share losses, there’s plenty of upside in the cards; the $203.65 average price target suggests investors will be sitting on returns of ~71% a year from now. (See Alibaba stock analysis on TipRanks)

See what top Wall Street analysts say about your stocks >>

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

Alibaba (BABA), a world-class online retailer that some call the Chinese answer to Amazon (AMZN), is having a rough time with things lately. I remain bearish on Alibaba because far too many forces are aligned against this company, which will make for rough going for investors. (See Analysts’ Top Stocks on TipRanks)

Alibaba's year in share prices is pretty much the definition of disaster. The company led off the year with an uptrend that brought it from the $220 range to the $270 range, and that looked solid enough. However, that gain was pretty much the last major uptrend that Alibaba would see in 2021.

The company retraced its gains back to the $220 range. It stayed there for much of April going into May. Then, another slip brought the company slightly lower. Such slips continued intermittently until October, when a resurgence brought new hope of retracing to $200.

However, that was short-lived as mid-November brought a plunge that continues to this day. Alibaba is now trading at a level not seen since 2017.

Another blizzard of bad news recently slammed into the company. A downgrade at Atlantic Equities is perhaps the latest point. The analyst downgraded Alibaba from "overweight" to "neutral." The biggest issue was two particular Alibaba properties: Taobao and Tmall. Atlantic Equities analysts were skeptical that either would see improvements in their overall performance any time soon.

That was just the start, however. Alibaba's cloud business also lost a major ally in the Chinese government. The Ministry of Industry and Information Technology suspended a partnership arrangement with Alibaba Cloud for the next six months. The reason? Alibaba Cloud apparently failed to report a security vulnerability in the Log4j logging library system.

Since Log4j is widely used, the latest reports suggest that the security vulnerability has been exploited extensively already. Alibaba Group Holding has also slipped from the worldwide list of top 10 companies by market capitalization.

Badly Beaten and May Get Worse

Essentially, the problems Alibaba faced previously are all still in play. Moreover, these problems may be getting worse. The blistering regulatory environment that Alibaba has previously taken on is just as bad as it previously was.

It may actually be worse; one of China's regulators directly cutting ties with the company for six months isn't a help for Alibaba Cloud. Sliding out of the top 10 in market cap worldwide certainly doesn't underscore Alibaba's image as a globe-straddling titan.

Worse, Alibaba recently released a turnaround plan that doesn't look like it will turn around much of anything. One of its tentpole principles is to increase the number of subscribers in its 88VIP subscription program.

There's a good reason for this; 88VIP subscribers spend an average of eight times more than the average customer does. However, 88VIP subscribers only make up around 50 million out of the 946 million monthly users the company has.

Management is also seeking to improve performance and draw interest for its artificial intelligence systems on digital advertising. The company is looking to invest in emerging growth areas, mostly focused on the Taobao Deals group-buying marketplace. These plans are uncertain at best.

Wall Street's Take

Turning to Wall Street, Alibaba has a Strong Buy consensus rating. That's based on 22 Buys and three Holds assigned in the past three months. The average Alibaba stock forecast of $203.65 implies 70.8% upside potential.

Analyst price targets range from a low of $140 per share to a high of $252 per share.

Concluding Views

All the problems Alibaba was facing previously are still in play. With Evergrande's collapse now a real thing instead of a potential hazard, there's likely to be fallout. Any wealth effect that might have been realized by climbing investment is lost. That's likely to directly impact disposable wealth and the confidence required to spend it.

Throw in a regulatory environment that only seems to get more hostile for Alibaba, and the picture starts looking bleak. I'm bearish on Alibaba because there's entirely too much going wrong for the company, and its prospects for improvement look like a disaster waiting to happen.

Disclosure: At the time of publication, Steve Anderson did not have a position in any of the securities mentioned in this article.

​Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates.  Read full disclaimer >

Investors in Alibaba Group Holding Ltd (Symbol: BABA) saw new options begin trading today, for the February 2022 expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the BABA options chain for the new February 2022 contracts and identified one p

What happened Shares of Alibaba Group Holding Limited (NYSE: BABA) stock that popped on positive analyst commentary yesterday fell back to earth on Wednesday after Reuters reported that a key government ministry is cutting ties with Alibaba.

Consumer stocks were mixed premarket Wednesday. The Consumer Staples Select Sector SPDR Fund (XLP) was 0.32% lower, and the Consumer Discretionary Select Sector SPDR Fund (XLY) was recently advancing by 0.40%.

The NASDAQ 100 Pre-Market Indicator is down -45.63 to 15,940.65. The total Pre-Market volume is currently 24,415,244 shares traded.The following are the most active stocks for the pre-market session: Allakos Inc. (ALLK) is -73.58 at $10.81, with 4,166,166 shares traded. As repor

The Chinese Ministry of Industry and Information Technology (MIIT) has suspended its cooperative partnership with Alibaba Group Holding Ltd.’s (BABA) subsidiary Alibaba Cloud Computing following its failure to report and address a cybersecurity vulnerability, according to a report by Reuters citing 21st Century Business Herald.

The telecommunications regulator said that Alibaba Cloud failed to immediately report vulnerabilities in Apache Log4j2, its open-source logging tool, to the ministry. The Java-based tool is used in enterprise systems and web applications.

The partnership, which was related to cybersecurity threats and information-sharing platforms, is scheduled to be reassessed in six months based on the company's internal reforms.

The ministry said, “This vulnerability may lead to remote control of equipment, which may lead to serious harms such as the theft of sensitive information and interruption of equipment services. It is a high-risk vulnerability.”

Alibaba Cloud notified the U.S.-based Apache Software Foundation after discovering a remote code execution vulnerability in the tool. However, the regulator said that it did not receive a report about the issue from Alibaba Cloud but rather from a third party.

Following the news, Alibaba’s shares were trading nearly 4% lower at the time of writing in the pre-market session.

About Alibaba Cloud

Alibaba Cloud provides cloud computing and artificial intelligence services to enterprises, developers, and government organizations in more than 200 countries and regions across the world.

Wall Street’s Take

After the release of the news, Daiwa analyst John Choi maintained a Buy rating on the stock along with a $170 price target (38.2% upside potential).

Further, CLSA analyst Elinor Leung reiterated a Buy rating on Alibaba with a price target of $250 (103.3% upside potential).

Leung said, “CEO Daniel Zhang believes China's consumption can continue to grow and that cloud is the next big growth pillar.”

Overall, the stock has a Strong Buy consensus rating based on 22 Buys and 3 Holds. The average Alibaba stock forecast of $203.65 implies 65.6% upside potential. Shares have lost around 52% over the past year.

Website Traffic

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into Alibaba’s performance.

According to the tool, compared to the previous year, Alibaba’s website traffic registered a 10.1% decrease in global visits in November. However, website traffic has increased 1.7% year-to-date versus the same period last year.

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