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Luke Kawa2/10/25

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.

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Markets droop as AI credit fears grow and jobs report looms

The S&P 500, Nasdaq 100, and Russell 2000 all slumped on Monday.

Black Bear with Hand on Head

To AI-nfinity... and beyond!

Deutsche Bank highlights four roadblocks for tech CEOs’ obsession: Data centers in space

The good news: “There are clearly technical challenges to making this a viable endeavor but these seem to be engineering constraints as opposed to physics,” per Deutsche Bank.

CHINA-JIUQUAN-SATELLITE-LAUNCH (CN)

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Matt Phillips11h

Bitcoin-sensitive stocks hammered as crypto declines

Bitcoin-sensitive stocks tumbled Monday, enduring a much steeper drop than the keystone crypto asset itself, which was down nearly 4%, falling below $87,000, as of 12:20 p.m. ET.

Goldman Sachs’ themed basket of bitcoin-sensitive equities was down more than 8%. (It consists of companies tied to bitcoin, either through mining, digital payments, crypto investment, or blockchain technology.) It was one of the worst performers among Goldman’s thematically curated baskets of shares on Monday.

Among the basket’s constituents, miners Cipher Mining, CleanSpark, Hut 8, TeraWulf, and IREN were getting the worst of it.

At midday, the basket was on its way to its worst day since November 24, when bitcoin was also languishing below $90,000 and the broader tech sector was going through a brief downturn related to rising worries about durability of the AI boom.

Among the basket’s constituents, miners Cipher Mining, CleanSpark, Hut 8, TeraWulf, and IREN were getting the worst of it.

At midday, the basket was on its way to its worst day since November 24, when bitcoin was also languishing below $90,000 and the broader tech sector was going through a brief downturn related to rising worries about durability of the AI boom.

GameStop rallies on bullish options activity as Michael Burry teases post

And let’s not sell the artist formerly known as “Best Buy Rilie” short, either.

GameStop store with person walking by

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Nvidia’s favorite stocks are getting shellacked as AI credit risk spreads

Nvidia’s “House of GPUs” is looking a little wobbly.

Shares of Applied Digital, CoreWeave, and Nebius — three of the four biggest equity positions held by the chip designer as of September 30 — are getting crushed on Monday.

Nvidia owned about $3.6 billion worth of these data center and neocloud stocks (with the overwhelming majority in CoreWeave) per its most recent 13F filing.

The AI credit risk that’s been most talked about in reference to Oracle’s widening credit default swaps spreads is also present in some of these firms, as well.

An Applied Digital bond due in 2030 is trading below $96 for the first time this month. That issuance was made to support data centers where CoreWeave will be the main tenant.

CoreWeave, which earlier this year received warrants enabling it to purchase a large chunk of Applied Digital shares as part of a data center leasing deal, sank last week after announcing a $2 billion convertible note offering that was later upsized.

Of course, it’s not just Nvidia-owned stocks, but the entire data center ecosystem that’s under pressure on Monday. Cipher Mining and IREN are also getting walloped — with Monday’s crypto tumble also likely weighing on these two bitcoin miners turned data center companies.

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