How to Play BABA Stock as Alibaba’s Growth Story Gets a Boost From the Chinese Government

Core Insights - Alibaba (BABA) achieved a 70% gain last year, significantly outperforming U.S. tech stocks and surpassing Alphabet (GOOG) as the best-performing "Magnificent 7" stock in 2025 [1] - In 2026, Alibaba has continued its upward trajectory, with a nearly 16% increase year-to-date, outpacing the average performance of U.S. tech stocks [1][2] Macro Developments - Positive macroeconomic factors and company-specific news have contributed to the rise in Alibaba's stock this year [4] - China has initiated an investigation into competition among food delivery companies, which is expected to alleviate the price war that has led to substantial losses for Alibaba in this sector [4] - The investigation is anticipated to help reduce cash burn for Alibaba's food delivery platforms [4] Government Support and AI Strategy - China's 2028 action plan emphasizes artificial intelligence (AI), marking a shift from previous crackdowns on tech companies, with Alibaba being a key beneficiary of this supportive environment [5] - The Chinese government strategically supports industries deemed important, as seen in the new energy vehicle (NEV) sector, which has seen significant adoption due to favorable policies [6] - Alibaba is positioned as a leading player in AI within China, with its AI strategy showing promising results, including over 700 million downloads of its Qwen AI models [7] - The company is expanding its global AI initiatives, establishing data centers in countries such as France, the UAE, Brazil, and Japan [7]