The recovery in China technology stocks remains mixed. JD.com (JD), an e-commerce firm, posted a strong net profit, leading to a stock rally. That ended quickly when Walmart (WMT) took advantage of the rally to sell its JD stock position.
Walmart is among the many Western firms exiting China. Geopolitical risks and the trade war with the U.S. make China an unattractive location for operations. Walmart, however, said it wants to focus on its strong China operations. That would require ending its financial investments in JD.
Alibaba (BABA) bottomed in the low $70s in June to close at over $85 last week. Analysts retained their positive view on the stock after Alibaba posted weak Q1 revenue. The firm reported non-GAAP EPADS of RMB16.44, down by 5%. Revenue grew by 4% Y/Y to RMB243.24B.
BABA stock is rallying because the company expects vertical integration in its fulfillment and logistics network through Cainiao to pay off. It expects results to improve in the second half of FY 2025.
In the semiconductor space, speculate on Wolfspeed (WOLF). Shares lost half their value ahead of the quarterly earnings report. In Q4, the company lost $0.89 a share after revenue fell by 1.0% Y/Y to $201 million. For Q1/2025, the firm expects losses to grow to $1.79 - $1.54 a share. This is a loss of up to $226 million.
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