Alibaba Group Holding Ltd (NYSE: BABA) is taking a big hit on Monday after President Trump announced another 34% reciprocal tariffs on goods from China.
BABA shares are down more than 10% today and over 20% versus their year-to-date high in mid-March, indicating investors are increasingly concerned about the potential impact of Trump’s new trade policies on the Chinese giant.
However, a deeper dive into Alibaba’s business suggests the e-commerce and tech behemoth may not be as exposed to Trump tariffs as many believe.
BABA’s global scale shields it from Trump tariffs
Alibaba is relatively better positioned than some of its rivals in terms of the ability to navigate new duties as China continues to represent a bigger chunk of its revenue.
While Alibaba’s global platform operates in the US, a significant portion of its sales comes from other international markets.
The United States is just one of many countries where the company does business.
This broad global presence and scale make Alibaba stock relatively more insulated from the impact of Trump’s tariffs.
Additionally, BABA shares currently pay a dividend yield of 1.72% as well, which makes them all the more exciting to own, particularly if you’re betting on a potential recession before the end of 2025.
Alibaba products remain cheaper than US alternatives
Investors should consider buying Alibaba shares on the recent pullback also because heavy equipment, including loaders and tractors, remains cheaper on its global platform despite new levies.
That price advantage over US alternatives could help sustain BABA’s sales in the world’s largest economy in the wake of an emerging trade war.
Together, these factors suggest Alibaba’s products could continue to sell in the US as the firm’s exposure to new tariffs is not that big. So, the risk is manageable.
Note that Wall Street remains bullish on Alibaba stock despite Trump tariffs, that’s been wreaking havoc on tech stocks as well.
The consensus rating on BABA currently sits at “buy”.
AI positions BABA shares for further upside
Alibaba stock may be worth buying on weakness also because the titan continues to spread its wings in the fast-growing artificial intelligence market.
In fact, the company based out of Hangzhou, China, is expected to roll out the latest version of its flagship AI model, the Qwen 3, over the next three to four weeks.
BABA’s commitment to AI even made Eric Jackson of EMJ Capital call it a better AI stock than Nvidia in a recent interview with CNBC.
The artificial intelligence-related strength has already started to show in Alibaba’s financials, further making the case for owning BABA shares in the current environment.
In February, BABA reported nearly 49 billion yuan in net income and 280 billion yuan in revenue for its fiscal third quarter – both comfortably ahead of analysts’ forecasts.
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