2025-04-03T15:55:00.000Z

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Stocks opened sharply lower on Thursday, following the official rollout of higher-than-expected U.S. tariffs on imports. There's no shortage of companies and consumers that will suffer from the inflationary pressures or rising input costs. However, there are some stocks likely to tumble in the aftermath of the new normal that should hold up better than the downticks suggest. Alibaba (NYSE: BABA) joined the majority of stocks opening lower on Thursday morning. On the surface, it makes sense. It's an e-commerce pioneer in China, one of the more prominent targets in the trade war. If you've ever bought from Chinese sites that offer eye-rubbing low prices, you have probably come across Temu, Shein, and Alibaba's own entry, AliExpress. Reality is kinder than the knee-jerk reaction, though. Let's delve into why Alibaba could be a no-brainer buy following the tariff-related pullback in its stock price. Going with the flow It may surprise you to learn that Alibaba has actually been one of this year's best performers. There are just nine stocks trading on U.S. exchanges with market caps north of $10 billion that have soared at least 50% this year. Alibaba isn't just one of them -- the Chinese e-tailer is the most valuable listed stock to have risen by more than 50% in 2025, with a market cap of $310 billion. The stock's 56% surge through the first three months of this year may seem surprising. President Donald Trump has upped his beef with the world's second most populous nation. President Biden also circled China as a target last year, and Alibaba delivered double-digit returns to investors n 2024. Alibaba is far removed from its all-time highs. The shares are down roughly 60% since peaking in late 2020. The past year and change of positive trading activity -- Alibaba has nearly doubled since bottoming out 15 months ago -- suggests that this is an investment built for meeting today's challenging operating climate. How can this be? What about the tariff impact on AliExpress? Alibaba has spent the last few years widening its global reach. Its business selling outside of its home country is growing faster than its domestic gains, but China itself still represents more than 85% of the company's sales. Perhaps more importantly, its domestic business accounts for more than 100% of its profitability. The $5.2 billion in sales generated by Alibaba's international e-commerce business in its latest quarter -- 13% of the $38.2 billion it clocked on the top line -- came on negative adjusted earnings before interest, taxes, and amortization. The business rose at a hearty 32% clip, compared to a more modest 5% year-over-year increase for the balance of its business. It's still a drag on Alibaba's bottom line.