Alibaba stock ( NYSE:BABA ) has been a battleground stock for years. While shares are still down over the last year, Alibaba has increased by 76% from its 52-week low. Good news from China has encouraged investors to be more optimistic about the company’s future, and Alibaba’s low valuation also helps. While Alibaba is up from its lows, shares could rise even further if China’s economic reopening is successful.
What Occurred?
Alibaba has been a poor performer in 2022, with its shares falling to less than $60 per share during last year’s fall. That’s a far cry from the $300+ per share Alibaba was trading at the end of 2020. While there are some valid reasons for a drop in share price relative to the peak two years ago, such as the failed Ant IPO and tensions between China and the US, the selling appeared excessive at times.
Alibaba has recovered significantly in recent weeks, most likely due to oversold selling last fall. Alibaba has risen more than 75% from its lows in the high $50s to a share price of slightly more than $100.
Why Is Alibaba Stock Rising?
The reasons for Alibaba’s recent surge are linked to some of the past issues investors have had with the company. Three factors stand out.
First, China’s Zero COVID policy hurt Alibaba, resulting in an economic slump in Alibaba’s critical home market. Second, Alibaba’s investors are concerned about Chinese regulation. Last but not least, some investors see significant risks in China-US relations.
Pressures are easing on all three of these issues, which should benefit Alibaba’s operations and stock.
Let us first examine China’s COVID policy. Over the last few weeks, China’s economy has opened up significantly as the government moved away from its previous Zero COVID approach, which had hurt the economy and resulted in demonstrations and turmoil as people in China were unhappy about harsh lockd...
Click here to read the full article on PressReach.com .Subscribe to the PressReach RSS feeds:
- Featured News RSS feed
- Investing News RSS feed
- Daily Press Releases RSS feed
- Trading Tips RSS feed
- Investing Videos RSS feed
Follow PressReach on Twitter
Follow PressReach on TikTok
Follow PressReach on Instagram
Subscribe to us on Youtube