BABA - Alibaba Group Holding Limited
164.10 +3.42 (2.13%)
Pre-Market: 8:58AM EDT
| Previous Close | 169.57 |
| Open | 164.44 |
| Bid | 162.68 x 1100 |
| Ask | 162.90 x 1300 |
| Day's Range | 160.02 - 164.57 |
| 52 Week Range | 129.77 - 211.70 |
| Volume | 32,040,862 |
| Avg. Volume | 14,289,996 |
| Market Cap | 416.434B |
| Beta (3Y Monthly) | 1.66 |
| PE Ratio (TTM) | 45.94 |
| EPS (TTM) | 3.50 |
| Earnings Date | Aug 21, 2019 - Aug 26, 2019 |
| Forward Dividend & Yield | N/A (N/A) |
| Ex-Dividend Date | N/A |
| 1y Target Est | 208.69 |
- Moody's•9 hours ago
Alibaba Group Holding Limited -- Moody's: Alibaba's FY2019 results support its ratings
Moody's Investors Service says that Alibaba Group Holding Limited's (A1 stable) fiscal year 2019 (FY2019) results (the financial results for the 12 months to 31 March 2019) were in line with Moody's expectations and will not affect the company's A1 issuer or senior unsecured ratings, or the stable outlook. "We expect that Alibaba's strong revenue growth and robust operating cash flow generation will continue to support its investment needs, and a credit profile appropriate for its A1 ratings," says Lina Choi, a Moody's Senior Vice President. Alibaba registered strong revenue growth of 50.6% year-on year, totaling RMB376.8 billion for the 12 months ended 31 March 2019.
- Insider Monkey•10 hours ago
The Tech Cold War Begins: How Big Tech is Affected
The tariff battle between China and U.S. has become more than just talk. After President Trump raised tariffs on hundreds of billions of dollars worth of imports from China, Trump has now targeted Huawei adding it to a trade blacklist. Huawei is a big company with around $100 billion in revenue last year. The intelligence community […]
- Motley Fool•16 hours ago
Baidu, Alibaba, or Tencent: Which BAT Stock Is Still Worth Buying?
The recent downturn in Chinese tech stocks has been tough and some giants are holding up better than others.
- Investopedia•18 hours ago
Primary Drivers of the Chinese Economy
Learn about the forces driving the Chinese economy and helping the country earn money. China has the first or second largest GDP in the world but is not nearly as developed as others in the top 10.
- InvestorPlace•19 hours ago
Alibaba Stock Is an Obvious Buy After Stellar 2019 Results
Alibaba (NYSE:BABA) unsurprisingly beat expectations for its 2019 fiscal year. Despite overarching trade tensions that have been grabbing headlines, Alibaba stock benefits from a diversified online-driven interest that somewhat insulates it from tariffs.Source: Charles Chan Via FlickrThe thing is, Alibaba's business interests are so expansive from ecommerce to cloud computing to logistics solutions to international retail, they are poised to continue do well in spite of heightened trade war-related volatility.While it's true that I have been bullish on BABA stock over the past two years, that bullishness has not been misplaced. Alibaba has proven that it is an unstoppable force as it dominates and innovates within the Chinese domestic retail sector and expands its reach internationally.InvestorPlace - Stock Market News, Stock Advice & Trading Tips How Alibaba Stock Stacks UpThough off its highs, BABA stock in aggregate is still worth $460 billion. It is a massive company that still manages to deliver 51 percent revenue on a quarterly and fiscal basis. To show how impressive that is, tech darling Amazon (NASDAQ:AMZN), delivered just 17 percent over the prior quarter and 25 percent on a fiscal year-over-over basis. * 7 High-Yield REITs to Buy (Even When the Market Tanks) This is at a time too when AMZN has admitted that growth is slowing. Based on the recent figures, BABA is clearly on a different trajectory.If we look at the all important gross merchandise value (GMV) metric. AMZN is in the neighborhood of $300 billion, and we know that that will grow as a slower pace than the past. BABA GMV transacted on its China retail marketplaces was the equivalent of $853 billion dollars for the year.It's hard to grow when the numbers get that big but BABA did just that. $853 billion marks 19 percent growth year-over-year. That's not even including its international retail ventures like Lazada and other investments.It's kind of incredible that the quarterly revenue breakdowns show every category growing by at least 20 to 30 percent. Meanwhile costs as a percentage of revenue, whether it be product development or sales & marketing or general have remained relatively constant.Driving a good portion of that growth is more effective user acquisition and penetration into less developed cities. Alongside those new users have been enhancements to improve click-through rate and purchase conversion.What BABA is doing is working. Last Note on Alibaba StockBABA's growth has been and continues to be so extraordinary that its almost an irony that BABA stock isn't yet part of an acronym. Instead of FANG it should be BANG.It's the job of investors to worry, to dig up concerns. However, Alibaba manage is so efficient, competitive, and shrewd that they leave investors with few concerns. Look at annual active consumers, for instance.In BABA's China retail marketplaces hit 654 million (twice the population of the U.S.). This represents an increase of 102 million consumers over the prior year. And BABA's mobile MAUs have similarly soared to 721 million, an increase of 104 million over March 2018.BABA is still growing its user base a good clip and remains more relevant than ever. In the U.S., that may not be obviously clear, but the numbers tell the story of "Alibaba becoming synonymous with everyday consumption in China."After seeing the fiscal year numbers and given that Alibaba stock now trades at less than a 50 P/E, a buy call feels like a no brainer.As of this writing, Luce Emerson did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 High-Yield REITs to Buy (Even When the Market Tanks) * 5 Great Blue-Chip Stocks to Buy Today * 7 Tech Stocks to Buy That Are Also Perfect for Retirement Compare Brokers The post Alibaba Stock Is an Obvious Buy After Stellar 2019 Results appeared first on InvestorPlace.
- Investopedia•19 hours ago
How Does the Stock Market Work?
Learn how the stock market works, what it means to own stocks and shares, how shares are classified, why companies issue shares, and the pros and cons of an exchange listing.
- InvestorPlace•19 hours ago
Bulls Are Winning the Trade War in JD Stock
This company is not without risks. Still, following earnings JD.com (NASDAQ:JD) is sporting attractive fundamentals. The case for bullish investors looks compelling. Let me explain.Source: Daniel Cukier via FlickrIt hasn't been easy to be a JD stock investor. Shares topped out more than 16 months ago. And despite 2019's rally, JD is still more than 40% removed from those all-time-highs.But the winds of change are upon shares right now.InvestorPlace - Stock Market News, Stock Advice & Trading TipsJD's most recent quarterly confessional delivered strong evidence that the multifaceted tech giant is making the right moves. China's other answer to Amazon (NASDAQ:AMZN) easily beat Street top and bottom-line forecasts just over a week ago. But it's not just the headline beat which has our attention.First-quarter sales saw solid growth of 21%, which while slowing, is stabilizing, with management forecasting revenues for Q2 to grow by 19% to 23% annually. That's nice. And there's more. JD stock is also capturing higher gross margins with help from the company's expanding services business. That division grew by 50% and producing positive free cash flow courtesy of improved operating cash flow and project divestments. * 7 High-Yield REITs to Buy (Even When the Market Tanks) Lastly, JD stock's strategic partnership with tech giant Tencent has also been renewed. That's good news too. In conjunction with JD's Walmart (NYSE:WMT) collaboration, the trio are taking on Alibaba (NYSE:BABA), China's other but much larger e-commerce and cloud play. JD Stock Weekly ChartOf course, trade war risks remain for JD stock. And as we can see on the price chart below, an extended neckline and 38% Fibonacci level combine to form an area of challenging resistance. But there are reasons to be optimistic.First, with the head and shoulders pattern having completed in a successful triple bottom, today's "return move" test of the neckline in JD shares holds much less weight as potential resistance as the dominant pattern is bullish.Also of interest, unlike shares of BABA -- which saw investors taking profits following earnings -- JD stock found a bid. Not only that, shares remain above pre-earnings prices despite last week's trade war escalation and lower prices in the broader market for the five-day period.Finally, with last week's price action in JD stock resulting in upside confirmation for the decision-based doji candlestick, there's additional evidence JD's relative weakness on the price chart is turning the corner towards a period of outperformance.My recommendation if you want to go long JD stock is to use an improvised signal to buy shares and provide protection against unwanted downside risk. The suggestion is to wait for JD.com to rally back above the doji high of $30.47 before purchasing shares.The buy trigger remains in effect only if the low of the doji holds. Even though the triple bottom looks important, I'd be hesitant to be long JD stock, as there's a lot of downside risk between the doji if it fails to hold and December's key pattern low.Should shares produce a signal to purchase JD stock, I'd set an initial stop below the doji candle's closing price $28.17. The $2.30 exposure is the equivalent of 7.5% JD stock risk. In our view, along with taking initial profits at the 50% retracement level near $35, this looks like sufficient wiggle room off and on the price chart.Investment accounts under Christopher Tyler's management do not currently own positions in any securities mentioned in this article. The information offered is based upon Christopher Tyler's observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional options-based strategies and related musings, follow Chris on Twitter @Options_CAT and StockTwits. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 High-Yield REITs to Buy (Even When the Market Tanks) * 5 Great Blue-Chip Stocks to Buy Today * 7 Tech Stocks to Buy That Are Also Perfect for Retirement Compare Brokers The post Bulls Are Winning the Trade War in JD Stock appeared first on InvestorPlace.
- CNBC•21 hours ago
Alibaba billionaire Jack Ma: I know nothing about tech or marketing—this is the secret to my success
Jack Ma is the founder and chairman of the Chinese e-commerce juggernaut Alibaba BABA , which has a market capitalization of about $420 billion. Currently, Ma is worth $36.5 billion , according to Forbes. "I know nothing about technology, I know nothing about marketing, I know nothing about [the legal] stuff," Ma said at the Viva Tech conference in Paris on Thursday .
- SmarterAnalyst•23 hours ago
Trade War? Top Analyst Says Alibaba (BABA) Stock Still a Buy
Last week, Chinese e-commerce giant Alibaba (BABA) posted strong earnings results. However, investors weren’t focused much on performance, as concern has migrated to increased tension between the US and China. Alibaba executive vice chairman Joseph Tsai used the earnings call to downplay any nerve of a continued trade war, saying he expects China to continue purchasing more products from the US and narrow the gap between the two, an essential element as to why the US initiated the tariffs in the first place.Regardless of the conflict, Baird's top analyst Colin Sebastian is encouraged by Alibaba's most recent quarter, as he maintains his Outperform rating on BABA stock with $195 price target.As always, we like to give credit where credit is due. According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, Sebastian has a yearly average return of 26% and a 74% success rate. Sebastian has an average return of 28.3% when recommending BABA and is ranked 20 out of 5,183 analysts.Overall, Alibaba had a strong final quarter to the fiscal year. Its main revenue driver — core commerce — grew 51% year-over-year (and about 5% above consensus). Its cloud business also continues to grow, up 76% since last year. Overall, total revenue came in at 49% higher than this time last year, though EBITDA margin fell.Alibaba continues to invest in growing its market share. Sebastian says the company seeks to gain market share “in lower-tier cities amid increasing competition, with higher quality products offered at value prices,” as the majority of company’s new users come from these locations. As a result, “management is playing the ‘long game’ [with its Taobao feed], and pausing further rollouts in order to focus on growth and market share in other segments.”But while Alibaba is known for its e-commerce strength, Sebastian says “the company’s influence across the digital landscape continues to expand,” noting a “string of acquisitions and internal investments [which] continue to broaden the revenue mix and investment profile.” For example, Alibaba is “closely tied to Alipay, an online payments company now larger than PayPal,” while it “possesses an emerging cloud computing platform (Aliyun), which we believe has significant potential to drive incremental growth.” So, similar to Amazon, while it is known for e-commerce, behind the scenes is an increasingly diverse and growing revenue streamAll in all, if last year is any indication, Alibaba and its investors do not want to see continued tension between the US and China. However, the Chinese e-commerce giant remains a 'Strong Buy' name among Wall Street analysts. In the last three months, BABA has won 15 back-to-back bullish recommendations. With a return potential of close to 30%, the stock's consensus price target stands at $216.33. (See BABA's price targets and analyst ratings on TipRanks) More recent articles from Smarter Analyst: * OrganiGram: An Under the Radar Cannabis Stock to Be Listed on the Big Board Today * The Clouds Are Getting Darker for Tesla (TSLA) Stock * Amazon (AMZN) Continues Diversifying; J.P. Morgan Bullish on the Stock * Micron (MU) Stock Remains a Long-Term Buy, Says Analyst
- Investopedia•yesterday
The World's Top 10 FinTech Companies
“Fintech is not only an enabler but the driving engine,” said Pierre Gramegna, the Minister of Finance of Luxembourg. FinTech is an amalgamation of finance and technology and is fast paving a new way for the future of the financial world. It is only a matter of time when everything around us will have FinTech as its focal point.
Bloomberg•yesterdayChina Tech Can't Spend Its Way Out of This Mess
Recent earnings reports from Baidu Inc., Alibaba Group Holding Co. and Tencent Holdings Ltd. show what happens when management remains desperate to keep the top line climbing. China’s biggest tech companies are not only battling a sustained economic slowdown, they’re getting to the natural end of a decades-long expansion – fueled by the theory that if revenue grows, profit will automatically follow. Baidu is the biggest victim of this folly.
- TheStreet.com•2 days ago
Baidu, Alibaba and Tencent All Reported This Week: A Chinese Tech Scorecard
As trade worries flared up again, the spotlight turned to Chinese stocks this week. -- all reported their quarterly earnings within days of each other, giving investors a glimpse into how the Chinese internet economy is weathering renewed trade tensions and other macro factors. Trade negotiations between the White House and Beijing broke down several days ago, leading to a $60 billion retaliatory tariff by China on U.S. goods and roiling the markets on Monday.
- CNBC•2 days ago
Masayoshi Son: Genius or insane? Maybe neither
SoftBank founder Masayoshi Son speaks in futuristic terms about his company, but the success of his late-stage VC fund is still unknown.
- CNBC•2 days ago
Masayoshi Son claims to have a 300-year vision, but his bets suggest he's making it up as he goes
Masayoshi Son's SoftBank has a 300-year plan, which could be genius but is probably just insane. Son made billions with his early Alibaba investment, but his first big Vision Fund bet, Uber, is not doing so well out of the gate, and he seems to have undercut it in part by making investments in competitors. Maybe Son is neither a genius nor insane, but just an ambitious businessman who likes to take big risks.
- Barrons.com•2 days ago
A Top U.S. Pension Loads Up on Alibaba, Cronos, and Zillow Stock, Sells PG&E
The Wisconsin Retirement System, one of only two fully funded state pensions, also slashed its holdings in PG&E, the struggling California utility, last quarter.
- Motley Fool•3 days ago
The Best Fintech Stocks to Buy in 2019 and Beyond
Fintech is transforming the financial industry from the inside out, and there will be lots of winners and losers. Before you invest, know these basic guidelines to this growing industry.
- Bloomberg•4 days ago
China’s Trade Warriors Can’t Hit Hollywood
It’s going to have a hard time retaliating, though, and not only because it doesn’t import enough goods to match the U.S. president tariff-for-tariff. One obvious target would be the $58.9 billion in services the U.S. exports to China. These include everything from Hollywood blockbusters to tourism and education. China has some experience with this.
- Investopedia•4 days ago
10 Companies Owned by Alibaba
Rapidly growing online retailer Alibaba Group has a wide array of dominant companies under its umbrella.
- Investor's Business Daily•4 days ago
Stock Market Rides Trade News Roller-Coaster; Cisco, Walmart, Alibaba, Pinterest: Weekly Review
The stock market sold off on the escalating China trade war, rebounded on upbeat comments from President Trump and a delay in U.S. auto tariffs, but then retreated again Friday. Growth stocks tended to outperform, but many chip stocks tumbled. Cisco Systems (CSCO), Walmart (WMT) and Alibaba (BABA) reported strong earnings, while Pinterest (PINS) plunged in its first quarterly report since...
- InvestorPlace•4 days ago
3 Chinese Stocks to Buy Now and Hold for the Long Haul
To say that Chinese stocks have been a roller coaster over the last year would be an understatement. Already, China has seen slower growth as it shifted from being a solely manufacturing-based economy to one based on services/consumerism. But with the trade war, Chinese stocks have been hit even harder, only to bounce back as a deal with the United States seemed to be within grasp.Then, President Trump tweeted. With no deal in sight, tariffs rising and even lower growth on the horizon, Chinese stocks have continued to sink over the last week or so.But this could be an interesting opportunity for long-term investors. China continues to dominate on the world stage and is arguably one of the most important economies. And while a deal may not be in sight today, there's a good chance that one will be ironed out eventually. Meanwhile, with its huge and growing consumer base, domestic growth continues despite various trade pressures. In the end, Chinese stocks could be a wonderful long-term play. And the recent hiccups have provided a "reset" in valuations ripe for the picking.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 5 Service Stocks That Can Win the Trade War -- According to Goldman Sachs With that, here are three Chinese stocks to buy today that are worthy of a long-term hold. Alibaba (BABA)Source: Shutterstock If there was only a way to combine all the best U.S. technology firms into one company, you'd have one of the most powerful Chinese stocks around. Oh wait, there is. And it happens to be Alibaba (NASDAQ:BABA).BABA's main bread-n-butter is its retail business. But unlike Amazon (NASDAQ:AMZN), BABA only serves as the marketplace and doesn't actually hold inventory. People sell products on the site. That provides higher margins than even almighty AMZN.The beauty is that founder Jack Ma has used the hefty cash flows from this business to fund a variety of other expansions. This has included everything from peer-to-peer lending, cloud computing, social media, and even tablets/mobile devices. This has created a monster among Chinese stocks. And the growth continues.Last quarter, active users on BABA's sites jumped 18%, while expansions into higher margined services and operations helped revenue surge 51% versus a year ago. Remember, this during all the trade war issues. With BABA now making moves into more rural areas of China, revenues and profits should continue over the long haul.Meanwhile, the e-commerce giant has seen its shares dip over the last few weeks. With forward P/E of about 24, BABA is just as cheap as its American rivals, but with a much larger opportunity set. Baidu Inc (BIDU)Source: Shutterstock Like BABA, Baidu (NASDAQ:BIDU) has taken its playbook from an American tech firm. In this case, we're talking about Google (NASDAQ:GOOG,NASDAQ:GOOGL).BIDU operates a search engine just like GOOG. And just like GOOG in the U.S., the Chinese firm is the top dog when it comes to search in the nation. Right now, BIDU controls more than 80% of the search traffic in China. With more than 731 million internet users -- a figure that is growing as access expands -- BIDU commands the attention of a lot of eyeballs. This means there's plenty of ad data to be had. And like GOOG, those ad sales pull in a ton of cash. Last year, Baidu's clocked in roughly $14.88 billion. That was a 28% year-over-year jump and mostly due to the firm's ad sales.Meanwhile, BIDU has continued to expand into some other lucrative areas. This includes video with its iQiyi (NASDAQ:IQ) subsidiary as well as A.I. and autonomous vehicles. This all should sound very familiar to Google stock investors. The best part is, most of BIDU's operations shouldn't be affected too heavily by the trade war. People will still search for funny cat videos and the news regardless of how steel prices are reacting. * 6 Chinese Stocks That Could Pop On a Trade Deal Under that guise, Baidu could be a bargain among Chinese stocks. With its 36% estimated EPS growth in 2020, BIDU stock trades at dirt cheap forward P/E of just 11.5. No wonder why fellow InvestorPlace contributor Bret Kenwell thinks BIDU can rally to $250 per share. Ctrip.com (CTRP)Source: Thomas Galvez via FlickrOne of the reasons for China's slowing growth has been its shift from being a manufacturing nation to one that focuses on consumerism. Which is why Ctrip.com (NASDAQ:CTRP) makes for an interesting buy these days.CTRP operates a series of travel and accommodation booking websites. Like its U.S. counterparts, hotels, airlines and other entertainment venues list their unused inventory or packages on CTRP's websites and consumers book through the site. Ctrip then collects a fee for doing so. Margins for the technology stock remain high as it doesn't really have overhead. This has allowed the firm to realize some decent profits over the years. Last quarter, CTRP managed to beat estimates by a wide margin.Meanwhile, travel continues to grow in China despite trade issues. Management estimates that revenues could jump more than 23% this year as more people hit the road and take vacations. Better still, is that CTRP has expanded its offerings to include more hotels/destinations in rural China. This allows the firm to add potential clients on both sides of the equation. Likewise, it's continued to add international capacity and hotel deals as well.In the end, CTRP offers an interesting domestically focused Chinese stock with plenty of growth left in the tank.Disclosure: At the time of writing, Aaron Levitt held a long position in AMZN. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Buy that Lost 10% Last Week * Top 7 Dow Jones Stocks of 2019 -- So Far * 5 Service Stocks That Can Win the Trade War -- According to Goldman Sachs Compare Brokers The post 3 Chinese Stocks to Buy Now and Hold for the Long Haul appeared first on InvestorPlace.
- InvestorPlace•4 days ago
Apple Stock Likely to Be Hurt by Trade Conflict
After Apple (NASDAQ: AAPL) reported its earnings recently, many analysts predicted that Apple's business prospects in China would stabilize. However, America's recent tariff hike and the level of negative rhetoric on both sides are big headwinds for Apple stock. Source: Shutterstock InvestorPlace - Stock Market News, Stock Advice & Trading TipsIn the last two quarters, Apple has blamed the slowdown of its sales in China on the country's economic weakness. However, it should be noted that big, Chinese consumer-facing companies like Alibaba (NYSE: BABA) have reported that their core businesses .are growing over 40%. This means that the decline of Apple's revenue in China is due to company-specific issues. * 6 Chinese Stocks That Could Pop On a Trade Deal Increasing the Stake for Apple StockIn recent tweets, President Trump has ramped up his rhetoric on trade. At the current junction, it's difficult for either side to back down. This means that a successful resolution to negotiations in the near- term is unlikely.Those who plan to hold Apple stock over the long-term should also focus on future trends developing within China. The recent tariff hike and rhetoric reduce the probability of an amicable trade deal. Even if a mutually acceptable trade deal is reached, the trade rhetoric of the past few months will have a negative impact on Apple's business and brand within China and, by extension, on Apple stock. The Chinese government wants local Chinese brands to increase their market shares at Apple's expense. For its second quarter which ended in March, Apple reported $10.2 billion of net sales from the Greater China region. That's a decline of 22% from the same period a year earlier.Last year, Apple generated $51.9 billion of revenue from China, equating to 20% of its total sales. After two quarters of fiscal 2019, it's clear that its China sales will easily decline by 20%-25% for the full year. That will have a big negative impact on Apple stock. Lack of Ecosystem in ChinaApple's biggest strength has been its strong ecosystem which increases the loyalty towards its products. However, in China, its ecosystem is weaker than in western markets. The main reason for that is the impact of Tencent's (OTCMKTS: TCEHY) WeChat, which provides almost all the services required by customers, including payments, communications, music, games, e-commerce and more. Late last year, Tencent announced that its mini-programs have one million apps and over 200 million daily active users. These mini-programs reduce the need to visit Apple's App Store. WeChat's platform will continue to grow stronger, adversely impacting Apple's ecosystem within China. Apple has been trying to improve the popularity of its Apple Pay within China for a number of years. However, AAPL has found it difficult to overcome the duopoly of Tencent's Wepay and Alibaba's Alipay. Last year, Apple started accepting Alipay within its retail stores., showing the massive hurdle faced by Apple in this area. The current trade tensions make its weaker ecosystem in China more crucial. Company-Specific ProblemIn the last two earnings report, Apple's management has hinted that its poor sales in China are due to the slowdown of the economy. China's GDP growth has certainly dropped slightly in the last few quarters. But there has not been a massive decline in consumer demand. Apple reported a 22% decline in its net sales in China in its March quarter and another 26% in the previous quarter. On the other hand, Alibaba reported 40% growth in its core commerce sales last quarter. As a result, the decline in Apple's China sales seems to be a largely company-specific issue.Source: IDCIn its recent report, IDC has estimated that Apple's unit shipments in its March quarter declined by a whopping 30.2%. At the same time, China's Huawei has shown over 50% growth. Most of the growth of Huawei has been in the domestic Chinese market. Huawei has been aggressively promoting its products and providing deep discounts. That has forced Apple to reduce its own prices. In the last few weeks of the March quarter, Apple gave massive discounts on the newer iPhones in China. The discounts on the iPhone XS Max were as high as 2000 Yuan (around $300). A Perfect Storm in ChinaThe recent jump in Apple stock after the earnings shows that Wall Street is ready to give Apple a pass for poor sales in Greater China. But the company can experience a perfect storm as a number of negative factors impact its business in China. Apple stock has been hurt when there were tensions between U.S. and China in the past. Even if a deal is made, the Chinese government can hit Apple with regulatory hurdles, hurting Apple stock. It would be nearly impossible for Apple to replicate in China the services it has launched in the U.S. There are already major domestic tech players in China which provide news, music, video, payments, and communication services. The revenue base of Apple's App Store can be further eroded due to the growth of WeChat's ecosystem.Finally, Huawei has a big home team advantage in China. It will also be launching 5G services sooner than Apple. It would be difficult for Apple to rely solely on its brand image to counter Huawei. The recent price cuts by Apple in China are a sign of the company's lower pricing power in this region. All these factors will continue to hurt Apple's net sales in China for the next few quarters, reducing the extent of any bullish runs by Apple stock. The Bottom Line on AAPL StockThe Greater China region contributed close to 20% of the total revenue of Apple in its last fiscal year. In the last two quarters, Apple has reported year-over-year declines of 26% and 22%, respectively, in net sales from this region. AAPL could experience further deterioration in China, depending on the result of the trade negotiations and the growth of its local rivals. It would be difficult for Apple to replace this lost revenue .It should be noted that the 22% decline in net sales in the Greater China region came despite heavy discounts offered by Apple in March. The near-term movement of Apple stock will heavily depend on its ability to generate decent results in China.As of this writing, the author did not own shares of any companies named. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Buy that Lost 10% Last Week * Top 7 Dow Jones Stocks of 2019 -- So Far * 5 Service Stocks That Can Win the Trade War -- According to Goldman Sachs Compare Brokers The post Apple Stock Likely to Be Hurt by Trade Conflict appeared first on InvestorPlace.
- Motley Fool•4 days ago
Baidu Posts Its First Loss Since Its IPO -- and Things Could Get Worse
The Chinese search giant’s core business is struggling as it ramps up spending on other projects.
- CNBC Videos•20 hours ago
Time to buy ArcelorMittal? Any interest in Alibaba? What about Fitbit? The viewers #AskHalftime
The "Halftime Report" traders answer viewer questions on ArcelorMittal, Alibaba, Fitbit and Allergan
- Investor's Business Daily Video•4 days ago
Technical Analysis: New Buying Opportunity Emerges For This Tech Stock
Sometimes a stock hits resistance at a buy point and quickly gets turned away. But if that stock holds tight and doesn't trigger a sell signal, a new buying opportunity may emerge. That's what we're seeing for Chinese internet giant Alibaba.
