Despite the obvious specter of a full-blown trade war, Alibaba (NYSE:BABA) shareholders have a big reason to smile. Just a little over a week ago, the company launched its annual Singles Day, an unofficial shopping holiday in China. On paper, the results should boost long-term prospects for BABA stock.

As CNN reported, BABA smashed its own record for an e-commerce related retail event. Over a 24-hour period, the Chinese flagship firm recorded a gross merchandise volume (GMV) of $30.8 billion. This figure easily exceeded last year’s tally of $24 billion.

The news couldn’t have come at a better time for Alibaba stock. For one thing, the underlying company — as well as its compatriots, such as Tencent (OTCMKTS:TCEHY) and JD.com (NASDAQ:JD) — have suffered steep declines this year. In addition, the technology sector overall has taken a dive, which obviously does most Chinese organizations no good.

The second factor is the anxiety-inducing trade war. President Donald Trump and his counterpart President Xi Jinping are scheduled to meet at the end of this month. So far, neither side has shown an overt concession to the other. Apparently, we’ll at least see a game of chicken, which also harms BABA stock.

The deteriorating U.S.-China relations exposed weaknesses in the Chinese consumer market. When the good times were rolling, most folks assumed that the country’s middle class would ride an inevitable upward trajectory. However, the back-and-forth tariffs have negatively impacted everyday Chinese workers. Many sharply criticized the communist government, an unprecedented shift in decorum.

So with all the severe headwinds working against Alibaba stock, the underlying company scored a critical victory. After all, this $30 billion GMV count will likely exceed this year’s Black Friday and Cyber Monday results combined.

But is this enough security to jump onboard BABA stock?

Singles Day Made BABA Stock More Complicated

In my last write-up for Alibaba stock, I discussed both the pros and cons of buying into its deflated price. Ultimately, I felt that the bullish and bearish arguments evened themselves out, leaving shares open to technical interpretation. Here’s how I ended my analysis:

If you’re interested in Alibaba, take a modest position now but keep the powder keg dry. Continued discounts are not out of the question.

I’m glad I signed off this way because BABA stock is going to get interesting over the next few months. Even with something supposedly confidence-inspiring like Singles Day, we have significant details to analyze.

A few days ago, The Motley Fool’s Natalie Walters described the $30 billion sales event as a “disappointment.” Walters rightly points out that while the GMV haul is a nominal record, the year-over-year growth rate declined heavily from last year’s result. In fact, at 27% in yuan terms, and less than 22% in dollar terms, it’s the worst Singles Day growth rate ever.

Management explained away this substandard figure due to the trade war, China’s equity-market meltdown, and changing consumer habits. However, they point out that China’s middle class is still growing and buying.

Since 2012, Single Day’s growth rate averages 81%. But the change in that growth averages a decline of 23.5%. Based on these performance metrics, we can extrapolate that in 2019, Alibaba will bring in just under $36 billion.

Is that enough to justify risking BABA stock? This is where forecasting becomes cloudy. So far, Alibaba has only gained 3% since Singles Day. Last year’s Singles Day lift was even worse. That said, shares traded at around $180 back then.

At $150 today, it remains to be seen if investors will keep supporting Alibaba stock.

Alibaba Lacks a Trump Card

Of course, the primary concern is that if buyers had trouble moving the needle when Alibaba’s Singles Day growth rate was 40%, a reduced rate of 20% or worse isn’t likely to boost BABA stock.

And while I don’t dismiss the idea that the Chinese consumer will come roaring back, this isn’t an ideal situation. The retaliatory tariffs have hurt both sides of the equation, but China is undoubtedly hurting more. As great as they are, they factually have the smaller and less diversified economy.

In my view, everything points to the upcoming meeting between Trump and Xi. Should cooler heads prevail, we could see Alibaba stock make good on its recent momentum. But we are talking about swamp-draining, wall-building Trump, so who knows what we’ll get.

Again, I go back to my earlier assessment on BABA stock. Shares appear to have formed a bottom, but my confidence in that bottom is very limited. If you’re optimistic, take a measured approach. This is a time to load the glove box, but not the entire truck.

As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.