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Best Stock to Buy Right Now: Alibaba vs. Amazon | The Motley Fool

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  Published in Stocks and Investing on Sunday, November 2nd 2025 at 10:18 GMT by The Motley Fool

Alibaba vs. Amazon: Which Stock Is Best to Buy Right Now?

In a sharply competitive e‑commerce landscape, two giants—Alibaba Group Holding Ltd. (BABA) and Amazon.com Inc. (AMZN)—continue to dominate their respective markets. The Motley Fool’s November 2, 2025 feature takes a close look at the financial health, growth prospects, and valuation differences of these two companies to determine which one offers the most compelling investment opportunity at this time. Below is a comprehensive summary of the article’s key points and supporting data, along with additional context gathered from linked sources.

1. Market Position and Core Business Models

Amazon remains the undisputed leader in North American and European e‑commerce, with a market‑share advantage that extends into grocery (Whole Foods), logistics, and cloud computing (Amazon Web Services, AWS). AWS alone accounts for nearly 40% of Amazon’s operating income, providing a high‑margin counterbalance to the low‑margin retail side. The company has also expanded into original content, streaming, and artificial‑intelligence‑driven personalization.

Alibaba dominates China’s e‑commerce scene, operating platforms such as Taobao, Tmall, and Alibaba.com. Beyond retail, it has built a robust cloud infrastructure (Alibaba Cloud) and a logistics arm (Cainiao). The company’s revenue mix is more diversified across retail, cloud, and digital media than Amazon’s, but it faces headwinds from slower growth in China’s domestic market and regulatory scrutiny.

2. Financial Health and Growth Trajectory

Amazon’s earnings growth is driven primarily by AWS, which added $9.1 bn in operating income, a 27% YoY rise. The retail arm, while still a significant revenue generator, has slowed due to the post‑pandemic normalization of consumer spending. Conversely, Alibaba’s cloud business grew 25% YoY, while its retail sales grew just 5%, reflecting the saturation of the domestic market. Yet, Alibaba’s free cash flow remains relatively modest due to heavy investment in logistics and data‑center expansion.

The article highlights that while Amazon’s valuation multiples are higher, they reflect the premium investors place on the cloud and growth in higher‑margin segments. Alibaba’s lower P/E and EV/EBITDA are indicative of a market that has penalized the company for regulatory risks, yet still reflects significant upside potential if the company can maintain its cloud growth trajectory.

3. Regulatory Environment

Alibaba has been under close scrutiny by the Chinese government, with antitrust investigations and the recent "Ant Financial" crackdown affecting its financial services segment. The article notes that the regulatory climate can impose constraints on Alibaba’s expansion plans, especially in fintech and data privacy.

Amazon faces less overt regulatory pressure in the United States, but it does confront scrutiny over its marketplace power, data collection, and labor practices. Antitrust hearings in the U.S. are more focused on potential competition concerns rather than operational constraints.

4. Growth Catalysts

Amazon:
- AWS Expansion into machine‑learning services, data‑analytics, and edge computing.
- Prime Membership Growth across new international markets.
- Amazon Fresh and Grocery Delivery continues to capture a larger share of the grocery market.
- Strategic Acquisitions such as Whole Foods and the recent push into robotics and autonomous delivery.

Alibaba:
- Cloud Service Scale as a global player competing with AWS and Azure, especially in the Asia‑Pacific region.
- Cross‑border e‑commerce initiatives such as Lazada and AliExpress expanding into Southeast Asia.
- Innovation in Logistics with Cainiao’s autonomous delivery and AI‑driven supply‑chain optimization.
- Digital Payment integration via Alipay, reinforcing customer loyalty.

The article underscores that both companies are likely to benefit from continued digital transformation, but Amazon’s diversified revenue mix gives it a more robust buffer against regional downturns.

5. Valuation and Risk Assessment

The article applies a discounted cash‑flow (DCF) model and a relative valuation approach. For Amazon, the DCF model suggests a fair value of $4,200 per share, close to the current trading level, implying a modest upside of 5–10%. For Alibaba, the DCF model projects a fair value of $260 per share, a 30% premium over the current price.

However, the valuation differences are largely driven by risk premiums:
- Amazon: Lower risk due to stable cash flows, global diversification, and the presence of AWS as a moat.
- Alibaba: Higher risk because of regulatory uncertainty and slower domestic growth.

The piece recommends that investors with a higher risk tolerance might consider Alibaba for the upside potential, whereas conservative investors should favor Amazon’s stability.

6. Investor Takeaway

Best Stock to Buy Right Now?
For the risk‑averse, Amazon offers the most reliable growth through AWS and a diversified global footprint.
For the higher‑risk, higher‑return appetite, Alibaba’s lower valuation and rapid cloud expansion present a compelling case, provided investors are comfortable with regulatory headwinds.

7. Additional Context from Linked Articles

1. "Amazon’s Cloud Dominance: Why AWS Will Keep Growing"
   This linked piece delves into AWS’s market share and the company’s push into emerging tech such as quantum computing. It cites AWS adding 1.5 million new servers in Q3 2025 and a 15% YoY increase in AI‑as‑a‑service offerings, reinforcing Amazon’s moat.

2. "Alibaba’s Antitrust Crackdown: How the Government Is Reshaping the Chinese E‑commerce Landscape"
   The article explains the Chinese government’s new antitrust guidelines and their impact on Alibaba’s marketplace practices. It highlights how the crackdown could slow Alibaba’s marketplace growth but may open opportunities for new business models that prioritize user privacy and fair competition.

3. "China’s Digital Economy: Growth, Risks, and Opportunities for Foreign Investors"
   This research brief provides macro‑level insight into China’s digital economy, noting that the country’s 2025 GDP growth target of 5.5% will be supported by e‑commerce, cloud computing, and fintech. It frames Alibaba’s performance in the broader context of China’s digital transformation.

8. Final Verdict

Both Alibaba and Amazon are titans of their industries, each with distinct strengths and challenges. The article recommends a balanced approach: adding Amazon for its proven cash‑flow stability and cloud expansion, while keeping a keen eye on Alibaba as a potential “value play” if the regulatory environment stabilizes and its cloud growth continues to accelerate. The decision ultimately hinges on an investor’s appetite for risk, time horizon, and belief in the long‑term dominance of each company’s respective markets.