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BABA the 100% AI titan, not MU & PLTR !
@JC888：
$Micron Technology(MU)$ and $Palantir Technologies Inc.(PLTR)$ are two of the hottest artificial intelligence (AI) stocks, at the moment. Both companies generate phenomenal revenue and earnings growth as demand for their products soars, thanks to developments in AI and US market did not let it go unnoticed. Why are they so “hot” now ? Comparison - Quarterly earnings. Both MU and PLTR are producing excellent financial results right now. MU Earnings. For Q1 2026, MU reported: Revenue of $13.64 billion beating analysts’ estimates of $12.83 billion. Earnings per share (Non GAAP) was $4.78 /share vs Wall street consensus’s of $3.94. Net Income (GAAP) amounted to $5.24 billion. PLTR Earnings. For Q4 2025, PLTR reported: Revenue hit the billion mark of $1.41 billion, surpassing estimates of $1.32 - $1.34 billion. Earnings per share of $0.25 also beat consensus of $0.23. Net Income (GAAP) was $609 million. MU vs PLTR - past 12 months Comparison - Stock price movement. Despite the pullback in software stocks in early 2026 (exacerbate by US attack on Iran), both are still exhibiting signs of resilience: As of Fri, 13 Mar 2026 closing, both stocks’ price movement for (a) past 12 months, (b) past 6 months, (c) past month and (d) year-to-date are as follows: MU : +313.28%, +170.10%, +6.59% and +35.10% respectively. PLTR : +72.81%, -11.83%, +13.48% and -10.07% respectively. Comparatively speaking, MU fared better - its shares continue to climb in 2026, hitting an all-time high of $445.29 in late January and the stock is now up +313% in the past year. As of 13 Mar 2026 closing, market capitalization for both stocks’ values stand at $479.61 billion (MU) and $360.87 billion (PLTR) , making them 2 of the biggest companies in the world. Comparison - Technical analysis. On Friday, both MU and PLTR, closed respectively for the week at $426.13 /share and $150.95 /share. Comparing Simple Moving Averages (SMA). MU stock price is above its SMA of 20-day ($408.24), 50-day ($385.20) and 200-day ($221.34). This signals a strong bullish trend across short, intermediate, and long-term timeframes. PLTR on the other hand, is above its SMA of 20-day ($141.70) only and below its 50-day ($154.45) and 200-day ($162.67). This indicates short-term bullish momentum, amid a broader intermediate and long-term downtrend or consolidation. PLTR’s SMA mixed setup suggests recent buying pressure that is not yet strong enough to overcome longer-term averages, acting as resistance. MACD. MU: MACD line (4.16) is below the signal line (6.75) and both are above its Zero line. With a negative divergence (-2.16), this indicates weakening momentum despite recent price gains, as short-term averages slow relative to the signal. PLTR: MACD line (1.06) is below the signal line (-1.67), with both above the Zero line. The positive divergence (+2.73) signals growing bullish momentum, indicating short-term averages accelerating faster than longer ones. RSI. Both stocks’ RSIs are in neutral zone, neither overbought nor over sold. MU’s just above 50 mild bullish tilt, suggests recent gains outpace losses but lacks conviction for a strong uptrend. PLTR’s higher readings of 56.24, exhibits moderately stronger bullish momentum that supports ongoing trend strength without immediate reversal risks. Expensive AI stocks ? Above quarterly earnings have proven that both MU and PLTR have delivered excellent financial results, with bullish sentiments ready to power both stocks to higher grounds. However, they are also facing their biggest issue - Valuation. Case of MU. At first blush, Micron's forward P/E ratio of 10.7 might seem like an incredible bargain, with the memory chipmaker forecasting: Its EPS is ‘set’ to quadruple in its current fiscal year (FY 2026), hitting $35 /share, according to MU’s management. With analysts expecting even more growth in 2027. To determine if MU’s lofty estimates are sustainable, it is important to know exactly, what is driving MU's results. Growth Driver. MU’s sudden earnings spike stems from growing demand for high-bandwidth memory (HBM) chips. As demand grows, MU and the other memory chipmakers have reallocated capacity to meet it, but they have been slow to build new capacity. MU’s management has confirmed that 100% of their 2026 HBM supply is already sold under binding contracts. As a result, prices for memory chips have spiked, increasing profits and margins. Price hikes might also artificially inflate demand from buyers front-running additional price increases, further exacerbating the near-term imbalance. Micron's management expects the supply constraints to remain through 2027. However, as more capacity comes online and the supply-demand equilibrium normalizes, prices will return to normal levels gradually. With higher costs from new capacity, operating expenses will remain elevated, margins will shrink, and earnings will drop. This is the cyclical nature of the semiconductor business, and it is even more extreme for memory chips, that behave like basic commodities. Case of PLTR. As for PLTR, its forward price-to-earning (P/E) ratio of approximately 238.28x and price-to-sales (P/S) ratio of 86 -92 are hard to justify as ‘ideal’ investment. Even though the company produced revenue growth of +70% last quarter where Q4 2025 revenue hit $1.407 billion and 56% for full year FY 2025, with improving operating margins - that valuation implies the incredible earnings growth will continue for years to come. PLTR’s technical indicators of Simple Moving Averages, reflect this tension, with the stock price still below its 50-day SMA ($154.45) and 200-day SMA ($162.67), though it remains above its 20-day SMA ($141.70). Analysts currently expect earnings per share growth to exceed +40% in both 2027 and 2028. Even with those lofty expectations, the stock trades for 60x 2028 earnings forecasts. At its current valuation, any minor disappointment could send shares lower. In short, investors should not expect MU and PLTR recent returns to keep gaining so quickly. Their stock prices / valuations are currently very high, and the market is facing risks as the US-Iran invasion enters its 3rd week. Motley Fool predicts both will trade around a $400 billion market cap by end of 2027, if not lower. The Stealth AI Stock. According to Motley Fool, there is an AI stock, underappreciated by market, that could climb past $400 billion by 2027. Despite its market cap of $322.80 billion (as of 13 Mar 2026), Motley predict that it will be worth as much, if not more than both MU and PLTR by 2027. $Alibaba(BABA)$ represents a coiled spring for investors. Despite a sharp sell-off in shares over the last couple of months (see below), investors are presented with an incredible opportunity to buy shares of an AI cloud computing giant at an exceptional value: Falling to a 24-week low of $145.46 in February 2026. Falling by -13% in the past month. Flatling in the past 3 months. Rising by +6% from its low of $129. As of 13 Mar 2026 Like any US listed stocks, BABA face competitive pressure and geopolitical risks, but its current valuation more than accounts for them. At a market cap currently trending under $330 billion, it has significant upside from here. Financial Performance & Strategic Pivot BABA has seen its earnings drop significantly as it invests across both its (a) retail operations and (b) cloud computing business. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) decreased -64% YoY in its Q2 2026 earnings report. For period ending December 2025, BABA reported revenue of RMB 324.32 billion, slightly beating forecasts, with a realized EPS of US$1.75 /share. Its retail revenue grew a respectable +16% QoQ. However, earnings have been pressured by its push into "quick commerce", that is delivering items within an hour of a customer's order. The business requires significant scale to operate profitably, and BABA is spending heavily to promote it to customers and bring additional vendors and brands on board. Stock’s trajectory. From a technical standpoint, BABA is showing signs of a major bottoming process. (see above) Simple Moving Averages (SMA). As of Fri, 13 Mar 2026, BABA was marginally higher (+0.75%) rounding off the week at $135.21 /share. Based off that, it is still lower than its 20-day SMA ($143.69), 50-day SMA ($155.68) and 200-day SMA ($145.59). However, BABA’s SMAs have recently broken through the floor of its rising trend channel, with support levels identified near $132 - $136 level. MACD. With the MACD line (-6.99) below Signal line (-6.62) and both below the Zero line, it is indicating negative momentum. However, contrarian analysts observe a "multi-sequence completion zone" where the bearish leg is exhausting itself, potentially setting the stage for a rebound toward $180 - $198, as BABA’s cloud division gains traction. RSI. Its 14-day RSI, is at 33.40, just came out of “Oversold" terrority. It is not out of the oversold territory yet. This suggests a short-term bounce or stabilization is possible. However, confirmation from price action or other indicators is needed for an upward reversal. Investors maybe interested to know that historically, such levels in BABA have preceded sharp mean-reversion rallies. Formation. BABA’s 12 months stock movement shows a textbook Double Top formation that peaked between $183 and $175 in Q4 2025. The stock has broken through its "neckline" (the low point between the two peaks, roughly around $150). Although the RSI of 33.40 is just marginally off the "oversold" territory, its MACD is still trending downwards or gradually bottoming out, showing a "falling knife" scenario rather than a buying opportunity. Lastly, if the 50-day SMA continues to dive towards the 200-day SMA (a Death Cross potential) and crosses it, it will become a long-term bearish trend. BABA’s this week performance will be pivotal. Growth Catalyst - Cloud & AI. BABA’s opportunity in cloud computing remains massive. Revenue accelerated by +34% YoY to RMB 39.82 billion (USD 5.77 billion) for the Cloud division last quarter, driven by growing adoption of BABA's AI products. AI services are growing particularly quickly, up triple digits. BABA’s recent launch of the "Qwen-Image 2.0" model in March 2026 further cements its position as a global leader in agentic AI. To support that growth, BABA is investing heavily in AI development and training to keep attracting more customers with its Qwen models. It is also spending a portion of its planned $52 billion investment on infrastructure to support the growing demand. (see below) Valuation. Shares of BABA trade for just 17.77x (TTM) forward earnings expectations, a very attractive valuation for a company expected to grow earnings per share (EPS) at a solid double-digit pace over the next 2 years after recovering from its current investment cycle. That price more than accounts for the risk of investing in China, and Motley Fool expects the multiple to expand over the next couple years, pushing BABA's market cap above $400 billion by 2027, effectively dethroning the overextended "AI darlings" of the West. Despite recent pullback, the world as a whole is still chasing the AI hype with overvalued giants like MU, PLTR and some say even $NVIDIA(NVDA)$ . I wonder, if the ultimate risk is BABA volatility OR the cost of ignoring an AI powerhouse while it is still priced for skepticism ? What are your thoughts ? We will have a clearer picture on Thu, 19 Mar 2026. Remember to check out my other posts. (See below). Help to Repost ok, Thanks. Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks. In Volatile US market, sell XLE & buy XLU ? Can PSKY Survive the High Price of Success ? ORCL - A Buy Post Q3 Earnings or Debt Trap? Do you think both MU and PLTR are “overpriced” for its forward earnings ’? Do you think BABA’s true risk lies in “forever” geopolitical contention with US ? If you find this post interesting, give it wings! ️ Repost and share the insights ? Do consider “Follow me” and get firsthand read of my daily new post. Thank you. @Daily_Discussion @TigerPM @TigerStars @Tiger_SG @TigerEvents
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