Alibaba stock (NYSE: BABA) bull on Wednesday after investors celebrated a strong 618 shopping day.
The price of BABA received a lift above the $119.00 level on the U.S. ADR, surpassing the September high of $117.91. That will act as a support level for further gains.
Internal company data showed that the annual 618 shopping holiday currently underway in China is proving to be active this year.
The 618 shopping festival is an event held every June, created by Alibaba’s peer JD.com to commemorate that company’s founding date of June 18. Other retailers have used the day as a reason to boost sales and not miss out on active consumers. During the 618 period, online retailers offered big deals and discounts to shoppers.
The 2025 version is set to be very strong, according to preliminary data from Alibaba’s domestic e-commerce business, Taobao and Tmall Group, as reported by The South China Morning Post.
The data showed that sales of categories covered by government subsidies increased by 283% in the so-called “initial checkout period” from May 13 to May 26, compared to a similar period in 2024’s Singles’ Day.
Meanwhile, the newspaper reported that JD.com’s sales of home appliances and electronics surged 380% year-over-year in the first hour of its 618 campaign, which launched on May 30.
Meanwhile, analysts at UBS Group are optimistic about Chinese stocks, citing the recent tariff pause and potential stimulus measures from the Chinese government. The market is currently offering attractive low valuations, according to the analysts.
“I’m optimistic on China and Hong Kong, as the markets should focus on the valuation opportunities that they represent,” said Neil Hosie, the Swiss bank’s head of execution services. “There are still more stimulus measures that China can take that could further boost the market and sentiment”.
The bank’s latest comments came after global investors had been showing interest in divesting some of their money from U.S. equities. Hosie said the U.S. was over-represented in the MSCI World Index, with 72 per cent of its weighting invested in, or represented by, the U.S. Another point in the data is that only 20 American companies made up 31 per cent of the current weighting, he said.
On valuation, the Nasdaq’s latest price-to-earnings ratio recently stood at 31.70 times, while Hong Kong’s benchmark Hang Seng Index was at 10.86 times and Shanghai’s central board was at 15.60 times, according to Bloomberg.
“With uncertainty about the economic outlook, high valuations do not make sense, and a retreat in stock pricing should be expected, yet we haven’t seen that,” said Hosie.
Overseas investors may look to move some money out of the U.S. and Europe, with e-commerce retailers being a possible destination if the 618 sales boost upcoming earnings.
