Alibaba Shares Face Critical Test Amid Geopolitical Pressure

Investors are bracing for a pivotal week as Alibaba prepares to release its quarterly results this Tuesday, with shares experiencing significant pressure following a remarkable rally throughout 2025. The timing couldn't be more critical, as geopolitical concerns and notable investor moves have triggered a substantial pullback from recent highs.

All attention focuses on Tuesday, November 25, when the Chinese e-commerce giant will disclose its second-quarter financial performance for fiscal year 2026. Market sentiment appears decidedly cautious, with most analysts having revised their projections downward in recent weeks. The palpable nervousness reflects broader concerns extending beyond typical operational metrics.

Political Headwinds Intensify

The current selloff stems primarily from geopolitical tensions rather than technical factors. Reports detailing a White House national security memorandum have significantly dampened investor enthusiasm. Compounding these worries, allegations published by the Financial Times suggesting Alibaba provided technological support to China's military have reignited fears of potential sanctions against the company.

These political developments have overshadowed recent business advancements, including the mid-November launch of new artificial intelligence features for Alibaba's B2B platform. The market has demonstrated extreme sensitivity to Washington-based news, triggering immediate capital outflows despite positive corporate developments.

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Prominent Investors Reduce Exposure

Adding to the downward pressure, several major market participants have begun scaling back their positions. Regulatory filings reveal that Appaloosa Management, led by David Tepper, disposed of approximately 600,000 Alibaba shares. While the fund maintains a stake in the company, this partial divestment sends a cautionary signal throughout the investment community.

Assessing the Damage

Despite the recent turbulence, Alibaba's stock performance for 2025 remains impressive overall, having accumulated gains exceeding 60% since January. However, the current trend has turned negative. Closing the week at €132.80, the shares now trade nearly 18% below their 52-week peak, representing a significant correction from recent highs.

The upcoming week presents a crucial test for Alibaba's management. If Tuesday's earnings release fails to adequately address concerns regarding profit margins and political risk exposure, the current correction could deepen further. In the short term, risk factors appear to outweigh potential opportunities for investors.