BABA Stock Forecast: Alibaba Group tanks as China continues to grapple with COVID outbreaks

NYSE:BABA fell by 6.09% during Thursday’s trading session.
Analysts and investors are getting more bullish on Chinese stocks at their bottom.
China is holding its annual 618 shopping festival with anticipated mixed results.

Stocks Reporter FXStreet

NYSE:BABA reversed course on Thursday as the Chinese tech giant tumbled lower alongside a broader market sell off following the Fed rate hike announcements on Wednesday. Shares of BABA fell by 6.09% and closed the tumultuous session at $101.45. All three major indices tumbled into the close as any gains made during the rally on Wednesday were quickly erased. The Dow Jones sank below 30,000 after losing a further 741 basis points, and the S&P 500 and NASDAQ plummeted by 3.25% and 4.08% during the session.

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Despite what has been a horrendous year for Chinese stocks, analysts are starting to come around on the value of their current prices. Analysts like SC Asia’s Sid Chorara believe that AliBaba is undervalued and will outperform this valuation over the coming years. Chorara points to its cloud computing business and the fact that AliBaba has $15 billion in free cash flow which makes it one of less than 10 companies in the world with that kind of money on hand. Shares of AliBaba are down by 15.7% this year but more than 52% over the past 52-weeks.

BABA stock price

Currently, China is holding its annual 618 shopping festival which is held by the eCommerce titans like AliBaba and JD.Com (NASDAQ:JD). The festival usually has massive discounts for shoppers and is similar to the Black Friday shopping season in the United States. This year’s festival comes as China is easing conditions from a COVID-lockdown, and continues to grapple with rising cases in Beijing. Analysts anticipate slower than normal sales this year given the current economic environment.

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Stocks Reporter

FXStreet

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