President Donald Trump has taken aim at China, levying sky-high tariffs in what has become a tit-for-tat tariff war. 

Now, some Republican lawmakers have proposed delisting Chinese companies from U.S. stock exchanges, as they believe these companies pose “an unacceptable risk to American investors.” “These entities benefit from American investor capital while advancing the strategic objectives of the Chinese Communist party,” they wrote in a letter. 

More than 100 Chinese companies are listed on U.S. exchanges with a collective market cap of around $1 trillion. As a result, I reckon it would be a long, drawn-out process to delist these companies. That is assuming the U.S. Securities and Exchange Commission agrees. 

So, where does that leave Alibaba (BABA), the Chinese internet retail giant that is making massive strides in artificial intelligence (AI)? Should investors make a beeline to exit the stock as quickly as possible? 

Not really. Why? Let’s find out.

About Alibaba Stock 

Alibaba is a Chinese technology company specializing in e-commerce, cloud computing, digital media, and artificial intelligence. It operates some of the largest online commerce platforms in the world, namely, Taobao, Tmall, Alibaba.com and AliExpress.

Valued at a market cap of $304.8 billion, BABA stock has rallied 46% on a year-to-date basis. 

Strong Financials

Alibaba has grown at quite a healthy rate over the years, with revenue and earnings 10-year compound annual growth rates (CAGR) of 30.07% and 15.54%, respectively. Such solid growth rates are a reflection of not only the power of the Chinese retail consumer, but are also a testament to Alibaba's all-encompassing presence.

The most recent quarter saw the company reporting a beat on both revenue and earnings. Revenues for the December quarter grew by 8% from the previous year to $38.4 billion. Earnings per share went up by 13% to $2.93 per share, surpassing the consensus estimate of $2.66 per share.

The cash flow situation also remained robust, with net cash from operating activities rising to $9.7 billion from $8.9 billion in the year-ago period. Overall, the company closed the quarter with a healthy cash and equivalents balance of about $55 billion, easily surpassing its short-term debt levels of $2.9 billion.

Lastly, analysts are forecasting above-average growth rates for Alibaba with forward revenue and earnings growth rates pegged at 6.20% and 29.74% compared to the sector medians of 2.96% and 6.62%, respectively.

Strategic Drivers

So, despite all the uncertainties around the tariffs, why are analysts still bullish on Alibaba?

Alibaba’s core strengths in e-commerce and cloud computing, now reinforced by its strategic push into AI, present a compelling value proposition for investors. The company’s monetization of artificial intelligence currently revolves around offering infrastructure-as-a-service (IaaS) and high-performance computing, while also generating revenue through paid API access to its proprietary models, such as Qwen. 

Qwen, a large language model created by Alibaba Cloud, is open source and designed to empower Chinese developers to build applications directly on Alibaba’s cloud infrastructure. This not only deepens user engagement, but also enhances cross-selling potential and platform stickiness. The recently launched Qwen2.5-Omni-7B model has shown to improve enterprise productivity, driving stronger conversion metrics and decreasing attrition among merchants on Alibaba.com.

In parallel, Alibaba has introduced a steady pipeline of AI-powered tools over recent quarters. It has also teamed up with Apple (AAPL) to support new AI functionalities on iPhones tailored for the Chinese market. In a notable regulatory milestone, the U.S. Food and Drug Administration has cleared an AI-based cancer diagnostics tool developed by Alibaba, indicating growing global relevance of its AI capabilities.

Progress in the cloud and AI verticals has been evident in the company’s latest financial disclosure, where Alibaba reported EBITA of $430 million on $4.3 billion in cloud revenue. This marks a significant improvement in both scale and profitability for this segment.

On the international front, Alibaba is increasingly focusing on global growth, especially amid evolving tariff challenges. The latest quarterly results highlighted a robust 32% year-over-year expansion in its overseas business, making it the fastest-growing segment. The international division generated $5.17 billion revenue, signaling a meaningful shift toward a more geographically diversified revenue base.

In summary, Alibaba’s continued emphasis on technological innovation, platform scalability, and operational discipline positions it to sustain long-term growth across multiple verticals and geographies.

Analyst Opinions on BABA Stock 

Considering this, 20 analysts have unanimously attributed a rating of “Strong Buy” for BABA stock with a mean target price of $158.20, which denotes upside potential of about 24% from current levels.