Alibaba Shares Face Geopolitical Storm as U.S. Allegations Surface

Eleven days before its critical quarterly earnings report, Alibaba finds itself confronting serious allegations from U.S. authorities that have sent shockwaves through investor circles. The White House has leveled accusations that the e-commerce giant provided technical support for Chinese military operations targeting U.S. interests, creating fresh tensions between the company and American regulators.

Serious Security Concerns Emerge

According to documentation from the National Security Council, Alibaba allegedly supplied capabilities to China’s People’s Liberation Army that U.S. security officials consider threatening to national security. These charges represent a significant escalation in the ongoing technology conflict between Washington and Beijing, echoing previous confrontations involving other Chinese technology firms.

The company immediately pushed back against the claims, labeling the report “completely inaccurate.” Market reaction was swift and negative, with Alibaba’s stock declining 3.63 percent on Friday to close at €132.60. The timing of these developments poses particular challenges for the company as it prepares to report earnings.

Upcoming Quarterly Results Draw Heightened Scrutiny

All eyes now turn to November 25, when Alibaba will disclose its September quarter financial performance. Investors are watching closely, hoping the fundamental business results will provide clarity amid the current geopolitical uncertainties.

Despite the political headwinds, financial analysts have shown unusual optimism in their recent assessments. Multiple major institutions have substantially raised their price targets:

Should investors sell immediately? Or is it worth buying Alibaba?

• Jefferies increased to $230 (from $178 previously)
• JPMorgan lifted its target to $245 (from $170)
• Citi raised to $217 (from $187)

The analysts cited accelerated AI-related cloud revenue growth and advancements in artificial intelligence infrastructure as key reasons for their upgraded outlook.

Strategic Progress Amid Political Challenges

Alibaba continues to advance its strategic initiatives despite the difficult political environment. The company’s partnership with JPMorgan Chase to develop tokenized dollar and euro payments using blockchain technology demonstrates its ongoing commitment to international expansion.

On the technological front, Alibaba Cloud introduced a GPU pooling system designed to reduce the required number of Nvidia H20 GPUs for large language models by 82 percent. This efficiency improvement takes on added significance given current U.S. semiconductor restrictions.

The critical question remains whether strong quarterly results can outweigh geopolitical concerns when markets react on Monday. The answer could prove decisive for a stock that has already advanced more than 60 percent this year despite numerous challenges.