Next arrow is Alibaba. The stock has been extremely volatile over the past five years , then booming on AI, then falling again on AI and capital expenditures. We discussed this recently in this analysis video.
I have revised my assessment of Alibaba's stock because the promises made 5 years ago simply haven't been fulfilled , and therefore all that remains now are promises regarding artificial intelligence.
They release new models and better models, etc. This is good, but the pricing is very low, which means there will likely be a race to the bottom with all these models. If you have these models, in order to operate at those low prices, you need a competitive advantage.
You need something that you can assemble and then make money using that artificial intelligence. Something that is the dream of every large cloud service provider and is only owned by one company in the world, and that is Tencent.
They have Facebook, communications, marketing, gaming, and a payment system all in one comprehensive app, which Alibaba, unfortunately, does not have . Just a comparison, nothing more.
Therefore, they can invest heavily, but if they cannot implement it, they simply cut costs for others to implement, which poses a risk to internet service providers versus users, such as Microsoft companies that exploit the power of the internet.
For e-commerce, there is no real competitive advantage; there is a lot of investment, and the profit margin is decreasing. They are not expanding that within China. The promise was better customers and growing profit margins.
There is no international trend, there is high competition, companies like Timo and the like, regulations in Europe, and artificial intelligence. What will its price be, and what will the profitability be?
So, there is definitely some value, but to invest in Alibaba, I need it at a really cheap price, probably cheaper than it used to be. So, it's a risky gamble, and not something really worth pursuing.
Now, if the price drops to the single digits , we will reconsider the matter.
