## **Pros:** ✅ **E-Commerce Dominant Position:** Alibaba operates China’s largest online marketplaces, giving it a massive user base and strong pricing power across the retail and wholesale segments. ✅ **Expanding Cloud Business:** Alibaba Cloud is one of the top cloud service providers globally, and the clear leader in China and parts of Asia, giving Alibaba exposure to secular growth in cloud computing and digital transformation. ✅ **Robust Ecosystem & Network Effects:** The company has built a powerful ecosystem connecting e-commerce, logistics (Cainiao), payments (Alipay), entertainment (Youku), and cloud services, creating customer stickiness and multiple monetization channels. ✅ **Trendy Activities:** With its strategic focus on consumption, cloud computing, and globalization, the company is well-positioned for long-term growth, particularly amid the accelerating pace of digital transformation across various industries. ✅ **Ai & Quantum Computing Early Moves:** Alibaba is investing in quantum computing research and AI technologies, potentially offering long-term strategic advantages across its cloud and fintech divisions. ✅ **Fundamentals:** They are solid, with good earnings, a large cash position, dividend payments and share buy-backs. However, pricing cuts in particular have sharply reduced margins since 2022, which were formerly unique in the sector. ## **Cons:** ❌ **Chinese company:** The company is from China, with a very strong state power, which is scaring off investors. Its share price is around the level at which it was listed in 2014, despite its phenomenal fundamental growth. ❌ **Slower Domestic Consumption Growth:** China's economic slowdown and shifts in consumer spending behavior could pressure Alibaba’s core e-commerce business, especially in discretionary categories. ❌ **Heightened U.S.-China Tensions:** A Trump administration could reintroduce or escalate tariffs, technology restrictions, and financial scrutiny on Chinese companies, potentially increasing Alibaba’s geopolitical risks. ❌ **Intense Competitive Landscape:** Alibaba faces rising competition from Amazon, JD.com, PDD Holdings (Temu, Pinduoduo), and new players in live commerce and social e-commerce, requiring continuous innovation and price competitiveness. ❌ **Cloud Computing Pressure:** Alibaba's cloud segment faces intense competition and pricing pressures, evidenced by recent price cuts. ❌ **Market Share Defense:** Alibaba's focus on regaining market share might come at the expense of margin recovery, highlighting the tough balancing between growth and profitability. ❌ **Low-Cost Positioning:** With its e-commerce activities, Alibaba has a low costs reputation, which can affect the overall reputation of the group. This positioning might also reduce the company's pricing power. ❌ **Heavy AI Spending Pressure:** Alibaba’s AI push is strategically important, but it also requires very large spending on models, infrastructure and user acquisition. That raises the risk that near term profitability and return on capital may not fully reflect the level of investment being made today.