Alibaba Group (BABA) shares have surged to their highest level since early June, trading around $80.80 per share. Investor optimism is primarily fueled by anticipation of a strong Q2 2024 earnings report, slated for release on August 15th.
Positive Outlook
Alibaba’s subsidiary, Lazada, has reportedly achieved profitability, a significant milestone as the company seeks to expand its international footprint amid slowing growth in the Chinese market. Moreover, Alibaba’s market share has stabilized after a decline in 2021. DBS analysts project double-digit growth in Gross Merchandise Value (GMV) for Taobao and Tmall, while highlighting the potential of Alibaba’s international e-commerce platforms, which are expected to grow at a compound annual rate of 23% through 2027. Based on this, DBS maintains a “buy” rating on BABA stock.
Technical Analysis
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Technically, BABA stock is trading within an ascending channel and has reached its median line. However, a descending trendline from 2023 continues to exert downward pressure. The chart also exhibits patterns of false breakouts, suggesting a potential pullback below the psychologically important $80.00 level before the earnings release.
Investor Caution
Given the high expectations surrounding the earnings report, BABA stock is likely to experience significant volatility in the coming days. Investors should be prepared for both upside and downside surprises.
Key Points:
- Alibaba stock reaches two-month high
- Investor optimism driven by upcoming earnings report
- Lazada profitability and stabilized market share are positive signs
- Technical indicators suggest potential for pullback
- High volatility expected around earnings release
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