Alibaba Group Holding Ltd. (NYSE: BABA), which is a subsidiary of Alibaba Group Holding Ltd., suffered a major blow on Monday when President Trump announced he would impose another round of reciprocal tariffs – this time 34% – on Chinese goods.
BABA’s shares have fallen more than 20% today compared to their mid-March high for the year. This shows that investors are becoming increasingly worried about Trump’s trade policies.
A deeper look at Alibaba’s operations suggests that the tech and e-commerce giant may not be as vulnerable to Trump tariffs than many people believe.
BABA is protected from Trump’s tariffs by its global reach
Alibaba has a better position than its competitors in terms of its ability to handle new duties, as China represents a larger portion of their revenue.
Alibaba’s global platform is based in the US but a large portion of sales come from international markets.
United States of America is only one country where this company has business.
Alibaba’s global reach and size make it relatively less vulnerable to the effects of Trump’s tariffs.
BABA’s shares also pay a current dividend yield of 1.72 %, making them even more attractive to buy, especially if you are betting on the possibility of a recession by the year 2025.
Alibaba’s products are cheaper than US-made alternatives
Alibaba’s recent share price drop is a good opportunity for investors to buy shares. Heavy equipment such as loaders and tractor are still cheaper than on other platforms despite the new taxes.
BABA could benefit from its price advantage in comparison to US-made alternatives in light of a possible trade war.
These factors indicate that Alibaba could sell its products in the US, as it is unlikely to be affected by new tariffs. The risk is therefore manageable.
Wall Street is still bullish about Alibaba stock, despite Trump’s tariffs. These have also been having a negative impact on the tech sector.
BABA’s consensus rating is currently “Buy”.
AI Positions BABA Shares for Further Upside
Alibaba’s stock is a good buy on a weakness, but also because it continues to grow in the rapidly-growing artificial intelligent market.
The company, based in Hangzhou, China is planning to release the Qwen 3 – the company’s flagship AI product – within the next 3 to 4 weeks.
BABA’s dedication to AI led Eric Jackson, of EMJ Capital in an interview with CNBC recently, to call the stock a superior AI stock over Nvidia.
Alibaba’s finances have already begun to reflect the strength of artificial intelligence, which makes it even more compelling for investors in BABA in this current market.
BABA’s fiscal third-quarter results for February were comfortably above analysts’ expectations.
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