Should Investors Follow David Tepper Into Alibaba Stock?

Core Viewpoint - David Tepper's Appaloosa fund increased its stake in Alibaba by 159% in Q1 2024, indicating a potential shift in investor sentiment towards the company despite ongoing U.S.-China tensions [1]. Investment Analysis - Tepper's aggressive investment in Alibaba may prompt other investors to reconsider their stance on the stock, especially given his reputation as a seasoned investor [1][3]. - The stock has risen nearly 30% since its 2024 low on January 18, and it currently trades at a P/E ratio of around 20, suggesting it may still be undervalued despite a previous multiple of 10 [3][4]. - Alibaba's net income for fiscal 2024 was 71 billion renminbi ($11 billion), a 9% increase from the previous year, yet the stock trades below its IPO price from nearly a decade ago, making it an attractive option for long-term investors [4]. Risks and Considerations - Alibaba's stock is represented as an American Depositary Receipt (ADR), which carries specific risks, particularly due to past threats of delisting by the SEC and ongoing U.S.-China tensions [2]. - Risk-averse investors are cautioned against following Tepper's lead due to the potential for renewed regulatory scrutiny and geopolitical risks affecting the stock [5].