To The Moon

Why Alibaba’s Future Looks Shaky: A Bearish Outlook

It’s September 18, 2025, and while the buzz around Alibaba’s AI transformation is loud, I’m not convinced. With 144 posts on X and analyst upgrades from Goldman Sachs ($179 target) and Barclays ($190), the bullish case is clear. However, I see significant red flags, particularly the outsized influence of Chinese politics on its business. Here’s why I’m bearish on Alibaba and why caution is warranted.

Political Risks Overshadow Growth

China’s government has a tight grip on its tech giants, and Alibaba has felt the heat. The 2020 antitrust crackdown, which fined the company $2.8 billion, and the shelving of Ant Group’s IPO, are stark reminders of Beijing’s control. Even with recent regulatory easing, the political climate remains unpredictable. The X post’s mention of Alibaba’s “super boost” this year might reflect short-term relief, but history shows these reprieves can vanish. A single policy shift—say, new data security laws or a crackdown on foreign listings—could derail its cloud and e-commerce ambitions overnight. For a company reliant on China’s market, this political wildcard makes long-term stability a gamble.

AI Growth Story: Overhyped?

Goldman Sachs’ re-rating of Alibaba’s Cloud division to $43 per ADR sounds promising, but I’m skeptical. China’s tech sector is still recovering from years of regulatory headwinds, and Alibaba’s AI push faces stiff competition from domestic rivals like Tencent and ByteDance, plus global players like AWS and Microsoft. The $179–$190 price targets assume flawless execution, but with economic slowdown risks and a potential trade war escalation, revenue growth could stall. The 144 X posts might hype the AI narrative, but without consistent policy support, this story feels more speculative than sustainable.

Jack Ma’s Leadership: A Double-Edged Sword

The X post asks if I’m bullish on Jack Ma’s leadership, and my answer is no. While his vision built Alibaba, his 2020 criticism of regulators triggered the initial backlash, forcing him to step back. His reduced role leaves a leadership vacuum, and the current team lacks his charisma to navigate political minefields. Even if he returns informally, his influence can’t shield Alibaba from state interference. This uncertainty around leadership adds another layer of risk, making me question the company’s resilience.

Valuation Concerns

At current levels (likely $150–$160), Alibaba’s stock might seem undervalued with a P/E ratio below its historical average. But with net income dropping 70% year-over-year in 2023 and cloud margins under pressure, the upside to $190 feels optimistic. Analysts’ targets hinge on a rosy scenario—steady growth and no major disruptions. Given China’s economic fragility and potential for renewed regulations, I see more downside risk, potentially back to $120–$130 if sentiment sours.

Why I’d Exit, Not Add

The X post’s question about adding or exiting is a no-brainer for me: exit. With political risks looming, I’d sell at least half my holdings now to lock in gains and avoid a sudden drop. The “super boost” this year could be a head fake—profits might evaporate if Beijing tightens its grip again. Waiting for a dip to buy back lower is tempting, but the volatility makes timing tricky. I’d rather sit on the sidelines than bet on a politically tethered stock.

Final Verdict

Alibaba’s AI transformation and analyst upgrades are enticing, but China’s political overreach casts a long shadow. From regulatory unpredictability to leadership doubts and valuation concerns, the risks outweigh the rewards. I’m bearish—consider exiting or avoiding this stock until political stability returns. Keep an eye on policy news, but for now, this is a pass.

Disclaimer: This is not financial advice. Conduct your own research and consult a professional before investing.