Alibaba Group Holding Ltd (NYSE:BABA) had an eventful week in the market, with stock price going up by more than 7%. Alibaba started trading around $98 on Tuesday and was hovering above and below the $100 mark on that day, before closing just below $100. Stock has traded above $100 for the first time since its record breaking debut in September. Many Wall street firms have upgraded Alibaba stock to ‘buy’ status. Volition Capital’s Larry Cheng, Mashable’s Lance Ulanoff and CNBC’s ‘Squawk Alley’ team talked on CNBC about Alibaba’s valuation.
Alibaba Group Holding Ltd (NYSE:BABA)’s Jack Ma met Apple Inc. (AAPL)’s Tim Cook a week ago at California and many expected that the discussion would include Apple’s plan to expand in China and Alibaba’s plans for growth in US.
Cheng thinks that Alibaba Group Holding Ltd (NYSE:BABA) is not overvalued because they are operating in massive markets like consumer e-commerce in China, PWD e-commerce in China and global trade through Alibaba.com. He feels that they are just at the start line and have huge potential to grow ahead of them.
Ulanoff feels that recent happenings in Alibaba Group Holding Ltd (NYSE:BABA) stock might be termed as ‘Cook’ effect pointing to Ma’s meeting with Cook. He mentioned that Apple sees China has huge growth opportunity and he feels that both the companies are planning something very big.
There are some views around that Alibaba Group Holding Ltd (NYSE:BABA) has overshadowed many of its competitors with attractive valuation. But Ulanoff doesn’t think so.
“China is such a big market that you really do need to look around. Alibaba is this bright shining star and I have said before, […] it is kind of a unknown because we don’t really know how it is going to play in the US, which is the key expansion area for Alibaba,” Ulanoff said.
Alibaba Group Holding Ltd (NYSE:BABA) is currently operating a huge volume of transactions, much more than what Amazon.com, Inc. (NASDSAQ:AMZN) is doing, but Alibaba is generating lesser revenues when compared to Amazon. Cheng feels that Alibaba is operating in many markets and currently monetizing the user base and he thinks that revenues will grow as the time rolls on.