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BABA Stock: Alibaba Infiltrates Europe

But BABA isn't taking the fight to AMZN

Alibaba Group Holding Ltd (BABA) hasn’t been having a good year. Shares are off about 30% year-to-date and are barely above the $68 offer price from the massive Alibaba IPO about a year ago.

BABA Stock: Alibaba Infiltrates EuropeBut BABA stock has gotten a little of its mojo back, with shares up over 25% in the last few weeks after snapping back from a 52-week low around $57 thanks to negativity around China spending.

And as Alibaba earnings approach in about a week, investors seem to be more optimistic that the company has finally reached equilibrium after much volatility in the last 12-months.

Regardless of the short-term trends, investors continue to think big about the long-term prospects of BABA stock. Sure, there is pain in China right now, but unlocking all that consumer demand and tapping into e-commerce potential over the next decade could create huge opportunities for Alibaba.

Furthermore, Alibaba Group has its fingers in many pies — including film and cloud computing — and is much more than just a play on online shopping in the region.

Which is why BABA’s recent announcement that it is opening offices in London and Milan is such an encouraging sign. Then there’s Alibaba plans to open sites in Germany and France soon, efforts which will continue to boost its growth.

This, after already opening a U.S. office right in Silicon Valley.

The company called the move into Europe as “an important step toward global ambitions,” and that the facilities “will serve local brands, retailers, and government partners who seek to access the large and growing Chinese consumer class looking for high-quality international products and services.”

Notice that Alibaba isn’t talking about taking the fight to e-commerce giants like (AMZN) and eBay (EBAY). After all, it’s highly unlikely that BABA stock will be able to go toe-to-toe with Jeff Bezos & Co. on his own turf.

Rather, Alibaba is talking about partnering with businesses to help them understand the opportunities in China.

That’s perfectly aligned with what investors in Alibaba have been signing up for, then, and isn’t a boondoggle from taking on entrenched U.S. and European tech giants.

This kind of prudent growth should serve Alibaba well in the long-term, even if the immediate future of BABA stock is admittedly murky given the China slowdown.

Jeff Reeves is the editor of and the author of The Frugal Investor’s Guide to Finding Great Stocks. As of this writing, he did not hold a position in any of the aforementioned securities. Write him at or follow him on Twitter via @JeffReevesIP

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