E-commerce conglomerate Alibaba Group Holding on Wednesday joined an elite global tech club of companies with a market capitalisation of US$500 billion that includes China’s Tencent Holdings and US giants like Apple, Alphabet, the parent of Google, Microsoft, Amazon and Facebook.
Shares of Alibaba briefly touched an all-time high of US$198.86 on Wednesday on the New York Stock Exchange, taking its market capitalisation to US$500.8 billion and making it the second Chinese tech firm to reach the milestone after Tencent on November 20. The shares eventually closed 1.7 per cent higher at US$195.53.
The rise in shares came after New York-based investment bank Oppenheimer Holdings reiterated an outperform rating for Alibaba’s stock with a US$220 price target on Wednesday.
Analysts from Oppenheimer, led by Jason Helfstein, hailed the company’s initiative to connect online and offline businesses, saying it should “generate significant revenue for Alibaba’s retail business”.
They were also upbeat about Alibaba’s cloud business.
“In our view, growth will be fuelled by Alibaba’s improving personalisation in e-commerce through data-driven AI and media integration, continued adoption of Alibaba Cloud and greater physical store exposure,” the analysts said in the report.
Jack Ma Yun, the founder and executive chairman of Alibaba, told the World Economic Forum in Davos on Wednesday that globalisation has been going through some pains, but it could not be stopped.
“Nobody can stop globalisation. Nobody can stop trade. If trade stops, the wars will start,” he said.
His comments came after US President Donald Trump earlier this week approved tariffs of 30 per cent on imported solar panels and tariffs that start at 20 per cent for washing machines, the first major trade action this year. Most of the solar panels are imported from China.
Alibaba’s stock has risen 13 per cent so far this year, outperforming the S&P 500 Index’s 6 per cent gain. In 2017, Alibaba soared more than 90 per cent.
Alibaba’s third-quarter results are due on February 1.
By Thursday noon, Tencent’s market cap stood at HK$4.4 trillion (US$562 billion), with its shares trading at HK$462.40.
Currently, Apple is valued at US$886 billion, followed by Alphabet at US$812 billion, Microsoft at US$708 billion, Amazon at US$654 billion and Facebook at US$544 billion.
Alibaba owns the South China Morning Post.
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