Alibaba Stock: Buy, Sell, or Hold Over the Next 5 Years?

Alibaba is one of those companies that has lived several corporate lifetimes in the span of two decades. It started as an e-commerce pioneer, grew into a payments and logistics empire, survived a regulatory storm, and is now spending billions to reinvent itself as a cloud and AI powerhouse.

That’s a lot of costume changes for one company. And if you’ve been an investor through all of it, you know the script: the highs of the 2010s, the crackdown in the early 2020s, and now the “act three comeback” powered by artificial intelligence.

At today’s price of about US$176 a share, the question is uncomfortable but straightforward: where does this story go next?

Why Alibaba Still Matters

Think of Alibaba as two companies stitched together. On one side, you have e-commerce platforms like Taobao and Tmall, which remain the dominant forces in Chinese online shopping. On the other hand, you have a giant bet on cloud computing and AI, where Alibaba has committed about US$52 billion over three years.

That’s the duality: reliable cash flow from shopping carts and packages, paired with the uncertainty (and potential) of chips and data centres. Add in US$11.9 billion in share buybacks last year, and you can see why Alibaba still demands attention.

But there’s a shadow here too: regulators, shifting consumer demand, and the question of whether massive spending will ever translate into profitable AI dominance.

The Case for Buying

If you’re optimistic, the pitch is straightforward. Cloud and AI are the future, Alibaba is already one of China’s largest players, and the valuation looks cheap compared to U.S. tech giants. E-commerce keeps the lights on, buybacks reduce share count, and international expansion could add new growth.

The Case for Holding

If you already own the stock, the argument for doing nothing is strong. The core business is stable, and the transformation is still in progress. Holding gives you exposure to the upside of AI without requiring a new bet today.

The Case for Selling

If you’re sceptical, you probably point to Beijing. Regulations can shift quickly. Competition is fierce. Margins are under pressure from low-return businesses like food delivery. And growth has slowed to single digits. That’s not exactly the Alibaba of legend.

Five Years From Now

Markets like scenarios, so let’s sketch three:

• 🚀 Bull Case (25% probability): The stock reaches US$300. AI and cloud scale beautifully, regulators back off, margins expand, and Alibaba is re-rated as a global tech leader.

• ⚖️ Base Case (50% probability): Stock drifts to US$220. AI and cloud grow steadily but not spectacularly. E-commerce grinds out 8–10% growth. Buybacks help, but regulation remains a headache.

• 🐻 Bear Case (25% probability): Stock slides to US$140. Cloud disappoints, consumers spend less, and new restrictions weigh down growth.

Run the math, and the “expected value” works out to around US$220 — roughly 35% higher than today. Not a moonshot, but not dead money either.

What to Watch

• Whether cloud revenue grows faster than the capital Alibaba is burning to get it.

• Policy Shifts in Beijing on AI, Data, and Big Tech.

• A slowing Chinese economy is impacting consumer demand.

• The pace of share buybacks supports the stock.

Final Take

Alibaba is a Rorschach test. If you see promise in China’s AI future, it looks undervalued. If you see risk in Chinese regulation, it looks uninvestable.

The reality is in between. This is still one of China’s most powerful companies, buying back billions of stock, with real upside if its cloud bet pays off. But it also comes with uncertainty that no spreadsheet can fully capture.

Call it a “hold with optionality” — the kind of stock that could surprise on the upside, but won’t let you sleep soundly unless you’re comfortable with volatility and politics baked into the share price.

Disclaimer: This publication is for general information and educational purposes only and should not be taken as investment advice. It does not take into account your individual circumstances or objectives. Nothing here constitutes a recommendation to buy, sell, or hold any investment. Past performance is not a reliable indicator of future results. Always do your own research or consult a qualified financial adviser before making investment decisions. Capital is at risk.