Alibaba Group Holding Ltd – ADR (NYSE:BABA) (NYSE:BABAF) is on the cusp of a Golden Cross, signaling potential bullish momentum ahead.

Chart: Benzinga Pro

Despite the stock being down 15.85% over the past year and 2.97% year-to-date, Alibaba’s core e-commerce business remains robust. The company’s significant AI capabilities and expansion in the Chinese cloud industry are noteworthy growth drivers.

Alibaba Stock Nearing A Bullish Golden Cross

Technically, Alibaba’s stock is nearing a bullish Golden Cross. The 50-day simple moving average (SMA) is poised to cross above the 200-day SMA, signaling a potential uptrend.

Chart: Benzinga Pro

However, currently the stock is trading below its 5-, 20- and 50-day exponential moving averages, indicating bearish momentum.

The share price of $74.55 is below the 8-day SMA of $76.95, the 20-day SMA of $79.43 and the 50-day SMA of $77.54, reinforcing the near-term bearish momentum. The 200-day SMA is at $77.94, with the MACD indicator at -1.07, suggesting selling pressure. However, the Relative Strength Index (RSI) is at 39.56, indicating the stock is heading towards oversold conditions.

Solid Business, Attractive Valuation

Financially, Alibaba is in a robust position, with significant cash reserves and continuous revenue growth. The company's recent advancements in AI and cloud computing, along with its strategic focus on competitive pricing and technology upgrades, appear to position it well for future growth.

Alibaba’s core e-commerce operations continue to grow at a decent pace, with revenue for 2024 increasing by 8.3% compared to the previous year. Despite facing competition, Alibaba’s shares are attractively priced, trading at single-digit forward earnings multiple.

Alibaba also has over 50% of its market cap in cash after debt. If fundamentals and technicals align, Alibaba stock could offer deep value.

Strong AI and Cloud Ambitions

Alibaba's affiliate, Ant Group, spent $2.9 billion on AI research in 2023, advancing its large language model, BaiLing. This model powers various AI assistants on Alipay, enhancing services like "smart healthcare manager" and "smart financial manager."

Ant Group's overseas expansion and technological advancements reflect Alibaba’s broader strategy to strengthen its cloud and AI capabilities, essential for long-term growth.

Related: Alibaba’s Fintech Affiliate Ant Group Boosts Global AI Efforts with Multi-Billion Dollar Investment

While Alibaba faces competitive challenges, its strong financial position, strategic investments in AI and cloud, as well as the upcoming Golden Cross indicate a promising outlook.

Investors should monitor the technical signals and growth initiatives as Alibaba navigates its path to reclaim market dominance and deliver long-term value.

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