Jim Cramer: Alibaba Is “Still the Best Way to Play China” Despite Being Down 18% YTD
Jim Cramer took a bullish stance on Alibaba despite its brutal year-to-date slide, pairing the call with two steady compounders he thinks belong in every long-term portfolio. Here is what he told one caller sitting on a sizable BABA position.
On the July 16, 2026 episode of Mad Money, a caller identified as D phoned in about his sizable Alibaba (NYSE:BABA | BABA Price Prediction) position and asked Jim Cramer whether patience was still the right call. Cramer’s response was to hold the position and let the investment cycle play out.
Cramer told D, “I think you need to have patience here. I think it’s just down on a dip. It’s really still the best way to play China.“ He then framed his own geopolitical stance, saying, “I am a harder line on the Chinese than most people you see on air. But you know what? I want to try to help people make money, and I think you can make money on Alibaba.“ Cramer also referenced China’s GDP growth figures as “down 20% and 4.4%” during the segment.
Alibaba Is Sacrificing Profits to Build Its AI Future
Alibaba, run by CEO Eddie Wu, is in a deliberate reinvestment phase. Fiscal Q4 2026, reported May 13, 2026, showed revenue of $35.28 billion, up 3% YoY, with EPS of $0.09 and an operating loss of $123 million. Adjusted EBITA collapsed 84% to $740 million as the company poured capital into AI infrastructure and quick commerce. Free cash flow ran to negative $2.508 billion on capex of $3.898 billion.
Cloud Revenue Jumps 40% as Alibaba’s AI Bet Takes Off
The bright spot was the business’s cloud unit. Cloud Intelligence Group revenue accelerated to 40% growth, with AI-related products at 30% of external cloud revenue, hitting an 11th consecutive quarter of triple-digit AI product growth. CEO Eddie Wu said, “Alibaba’s full-stack AI investments have progressed from incubation to commercialization at scale.”
BABA opened at $114.97 on Monday, July 20, before soaring 5.71% in intraday trading. The stock is down roughly 17.51% year-to-date but up 13.50% over the past month. Wall Street’s consensus target sits at $190.01, with 8 Strong Buy and 30 Buy ratings against just 2 negative calls.
Cramer Says Balance Alibaba With These 2 Long-Term Winners
Cramer paired his Alibaba call with 2 other top long-term ideas: “If you want some long-term winners, look at something like a J&J or Wells Fargo.” Both fit the steady-compounder profile that balances a volatile China ADR.
Johnson & Johnson (NYSE:JNJ) posted Q1 2026 revenue of $24.06B, up 9.9% YoY, and raised FY guidance to $100.3B-$101.3B in revenue with adjusted EPS of $11.45-$11.65. It just delivered its 64th consecutive year of dividend increases. Shares are up 23.63% YTD and carry a beta of 0.235.
Wells Fargo (NYSE:WFC), under CEO Charlie Scharf, reported Q1 2026 revenue of $21.45B and EPS of $1.60, returned $5.4B to shareholders including dividends, and now targets ROTCE of 17-18% after the Fed’s asset cap was removed in 2025. It trades at a forward P/E of just 12.
Key Takeaways
For Alibaba investors, the key questions are whether cloud growth remains near 40%, quick commerce becomes profitable, and eventual lower AI spending helps free cash flow recover. Alibaba generated $148.4 billion in FY2026 revenue and $3.89 in EPS. For now, Jim Cramer says Alibaba is still one of the best ways to invest in China, especially after the stock’s pullback in 2026.
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Thomas Richmond is a financial writer and content strategist with 5+ years of experience covering stocks and financial markets. He has published over 250 articles focused on individual stock analysis, helping investors better understand business fundamentals, stock valuations, and long-term opportunities.
Thomas previously served as a Content Lead at TIKR, a stock research platform, where he helped scale the company’s blog to hundreds of articles per month and contributed to a weekly newsletter reaching more than 100,000 investors.
He specializes in breaking down complex companies into clear, actionable insights for everyday investors, with a focus on fundamentals-driven research.
His work has also been featured on platforms including Seeking Alpha and Sure Dividend.
Outside of work, Thomas enjoys weight lifting and soccer.
