Alibaba Group Holding Ltd (NYSE:BABA) is one of my favorite companies within the technology space. Technology is a big part of NexGen investing. It’s a theme that’s tied to nearly every sector in the market. There is huge potential here, especially for BABA stock.
Led by Executive Chairman Jack Ma, BABA is a half-trillion dollar company. It’s often referred to as China’s Amazon.com, Inc. (NASDAQ:AMZN) thanks to the Taobao online marketplace. Alibaba is much more than just an e-commerce company, however, and its valuation has yet to reflect how much it could be worth. It’s likely that Apple Inc. (NASDAQ:AAPL) will be the first $1 trillion company, but I suspect several Chinese tech companies will be right on its tail.
What makes BABA one of those contenders is its unique business model.
Alibaba invests in several NexGen sectors. This provides its shareholders with multiple ways to profit from the technology revolution. Anything and everything from artificial intelligence to electric vehicles to bike-sharing programs could be a huge winner for the company. In fact, Ant Financial, one of Alibaba’s divisions, recently reached $95 billion in consumer lending.
BABA: China’s First $1 Trillion Stock
In a few years, the sum of the parts will be worth much more than today’s valuation. And while $1 trillion may sound like a moon shot, it would actually only require BABA’s stock price to double.
Looking at the chart, I suspect the stock is setting up for its next big rally after consolidating for the last six months. It hit an all-time high in late January before falling with the global equity correction. And then BABA spent the next few weeks trading between $170 and $195. However, BABA broke out this week to its best level since that January spike.
This action is similar to what the stock experienced in late 2016 and early 2017, when it consolidated before starting a new uptrend that led to the share price doubling.
If history is about to repeat itself, BABA could be on the verge of nearing the magical $1 trillion threshold!
Matthew McCall is the founder and president of Penn Financial Group, an investment advisory firm, as well as the editor of FUTR Stocks and the ETF Bulletin. Matt just launched two new investment advisories focused around the “next” generation investing theme. His trademark three-prong investing approach targets the mega-trends old Wall Street is missing out on. Click here for more information on the “NexGen” Experience.
