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]

Core Insights - Palantir Technologies has experienced significant growth, with its stock rising approximately 2,300% since the release of ChatGPT in late 2022, leading to a market capitalization of around $424 billion [1][2] Palantir Technologies - The company has improved its operating results since launching its Artificial Intelligence Platform (AIP) in 2023, which enhances user interaction with its data software through natural language [4] - In the most recent quarter, Palantir reported a 48% year-over-year increase in total revenue and an adjusted operating margin of 46%, with U.S. commercial sales up 93% year-over-year [5] - Despite strong performance, Palantir's stock is considered overvalued, trading at an enterprise value to EBITDA multiple of 221 and a price-to-sales ratio exceeding 100 times forward estimates [6] Alibaba - Alibaba is a major player in the global e-commerce market, facing competition from companies like PDD Holdings and ByteDance, but continues to be a significant profit center [9] - The company's cloud intelligence group, the largest in China, saw a 26% year-over-year growth, supported by triple-digit growth in AI-related revenue for eight consecutive quarters [10] - Alibaba plans to invest $53 billion in AI infrastructure from 2025 to 2027 and is developing custom AI accelerators, positioning itself favorably in the market [11] - The stock is currently trading at an enterprise value to EBITDA multiple of 15.6, suggesting it is undervalued compared to its growth potential [12] ASML - ASML is the leading provider of lithography equipment essential for advanced chip manufacturing, holding a unique position with its extreme ultraviolet (EUV) machines [13] - The company benefits from a larger revenue base, allowing for increased investment in research and development, which enhances its market share [14] - Despite earlier concerns about demand uncertainty, ASML's shares have recovered, and the company is experiencing strong revenue growth of 34% in the first half of the year [16] - With a market cap around $380 billion, ASML is positioned to potentially surpass Palantir's market value by the end of next year [16]