Stars align for Alibaba with Tepper’s billion-dollar bet, de minimis exemption intact

Shares of Alibaba have been on a tear, up more than 6% on Monday and about 30% year to date. A few factors behind today’s rally and the broader ascent:

• The “de minimis” exemption, which allows cheap imported goods from the likes of Alibaba and PDD Holdings (the parent company of Temu) to avoid duties, remains intact.

• Trusted by Tepper: a filing from Appaloosa Management, the hedge fund run by billionaire David Tepper, showed that he added even more to the firm’s top holding in the fourth quarter.

• AI signal and noise: BABA has a model that it says is better than OpenAI’s or DeepSeek’s. The stock has also gotten a bid from chatter that it would be taking a position in the fellow Hangzhou company (which management denied).

• Valuation: BABA’s relatively cheap. Probably the best US megacap comparison is Amazon, and the valuation discrepancy is humungous. Alibaba’s forward price-to-earnings ratio is roughly 11.5x versus 32.2x, with an enterprise value to estimated EBITDA of ~6.9x versus 14.6x. Obviously, China’s not a shareholder-friendly jurisdiction (just look at a long-term chart of the MSCI China Index!), so there should be a reasonable valuation premium for American assets. But these premiums are well above their respective 10-year averages.

Alibaba is scheduled to report earnings on February 20.