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Alibaba stock vs. amazon stock we are talking about two of the biggest giants out there in the stock market today guys so many people own one of these stocks if now both of these stocks and what i want to go ahead and do for you guys here today is break them down kind of compare them against each other and give you my opinion on which one is is a better stock to
Buy out there and we’re gonna go through eight core categories that are super important whenever you look at a company all right some of these categories are more fact-based and some of them are going to be more based upon my opinion i’ll kind of explain my opinion on some of those categories you know things like who’s got the bigger opportunity which one does do
Fund managers understand more which one is more trustworthy which one has better leadership some of those things are going to be more in my opinion i’ll explain those and then some of these are just honestly fact-based like which one has better eps growth which one has revenue growth and that’s really what investing is at the end of the day it’s a it’s a balancing
Act of looking at the facts based upon companies and also looking at what your opinion is based upon that company in general so that’s we’re gonna go into i hope you guys really enjoy this by the way an analyst came out today and just upgraded amazon stock says the stocks going to $2,500 within the next 12 months so that should be very interesting to see if that
Works out there well over a trillion dollar valuation would be on the company if it does hit $2,500 it’s already getting very very close to 2000 so it is completely possible out there guys so anyways i hope you guys really enjoy us as always by the way if you enjoy stock market news make sure you follow me on instagram i post a lot of stuff on instagram you know
Lifestyle stuff and all that those kind of things but also a lot of stock market news i post on my instagram story so if you want to keep up to date on things that i’m paying attention to out there the market you might want to go ahead and follow me on there so let’s get into those guys we have eight core categories which one is more trustworthy as far as which
One does the investment community trust more which one do fund managers understand more which is a super important category because in that category where your fund managers are what really dictate the market they’re the ones that are controlling billions of dollars tens of billions of dollars some time hundreds of billions of dollars out there fund managers so
They’re really the ones that can dictate if a stock goes up or down based upon their buying which one has better leadership which ones better revenue growth which one’s better eps growth which company is more diversified which company has a better often bigger opportunity for the company to grow in the future and then which one has a lower 40 so trust category
This first category i would give this one to amazon right off the bat as far as which one is trusted more by wall street all right so one amazon has been a public company for a far longer time than alibaba alibaba he came to be a public company back in 2014 okay so it’s less than five years that company has been a public company amazon the other hand has been a
Public company since the 90s so it’s good there’s a gigantic track record of amazon growing doing numbers of the management being in focus all those type of things okay since then 90 students before the dot-com bubble they’re actually one of the few companies that made it through that whole thing okay and so so amazon’s been a public company for a long time it’s
Also an american company so it’s not chinese corporation chinese corporations aren’t trusted as much as american corporations you could say for right or wrong that’s your own opinion but it’s just a fact that american corporations are trusted more than chinese corporations all right and lastly there we can look at just the mere fact that a few by alibaba shares
You’re buying a 80s okay which is a different deal than if you buy amazon shares straight up okay it’s different ownership in the company all right so different ownership structure there so in terms of which stock is more trusted by wall street bye-bye you know fund managers buy just regular individuals out there amazon without question okay which stock do fund
Managers understand better once again this would be amazon once again okay guys in terms of big fund managers the majority of them are us-based fund managers all right as far as investing in stocks the the chinese market is still a market is very dictated on just you know capital investment in their own businesses and also real estate market the chinese still have
Not gotten big into stock market if you look at that the average diversification in terms of the wealthy individual in china it’s actually much tailored toward real estate investing rather than stock market investing whereas here it’s a little more towards stock market investing in a balance of real estate investing so fund managers understanding it you’re gonna
Deal with mostly u.s. people all right meaning who are the u.s. fund managers you know they all live in new york city who or the who’s a company they’re gonna understand much better obviously it’s amazon these are individuals who probably use amazon or very you know affiliated with the company that have understood it for decades now so amazon’s much easier to
Understand rather than alibaba which for the most part doesn’t have much of a presence here in the united states okay here in the united states alibaba doesn’t have much of a present unless you do drop shipping or something like that then you’re familiar with how he expressed and then than that alibaba is a you know a massive company in china and asia in general but
Outside of asia you know especially in the united states like you know most people just don’t know what alibaba is they have no clue what they do or anything like that so in terms of fund managers understanding it better amazon is definitely a very simple business model amazon amazon web services they also in twitch okay and that’s kind of the core of amazon there
Alright which one has better leadership this category i had to give a tie to okay i could not give you know it’s a one person or another leadership we’re gonna think at the top and the most important right we got jeff bezos on one side we have jack ma on the other side both these guys are phenomenal both these guys have done an amazing job growing their companies
Battling against our ton of competitors you gotta think about how many competitors coming into space all the time in both markets bo they’ve done an amazing job both have have led their companies to be huge public companies now in the limelight all that type of stuff so i cannot say jeff bezos is better than jack ma i cannot say you know the other executives there
At amazon or better than alibaba or vice at first i’d like they’re just both phenomenal management teams you don’t grow to be a you know a huge company like this like amazon’s you know i amazon’s starting to approach a trillion dollar market capita at this point in time and you know it could be they’re so depending on where the stock goes alibaba is around a half
A trillion dollar market cap you don’t get to that size without having an amazing management team there that can keep keep expanding that company over time so for that reason i just got to give it a tie there guys so as of right now it’s looking pretty good for amazon right revenue growth this one alibaba wins so this is a first category that alibaba wins flat
Out on a fact-based category so alibaba’s revenue growth right now is growing over sixty percent whereas amazon right now it’s nothing to sneeze out there growing in the high 30s right now amazon’s in the high 30s alibaba’s over 60 which is absolutely ridiculous for a company alibaba sighs all right so revenue growth right now it is in ali baba’s favor and it
Should probably continue to be in ali baba’s favor eps growth this one by far amazon is killing it okay amazon is killing it pretty much better than any other company in terms of their overall eps growth this last quarter was ridiculous they’re not consistent right now in terms of they have a consistent growth rate going with eps but some quarters right now it’s up
Hundreds of percent some quarters up thousands of percent okay in terms of what their net income is versus a previous year it is a massive massive improvement there for amazon right now in the eps category right now alibaba still is not very focused on eps i would say amazon is more focused on eps growth than alibaba is but amazon still isn’t even at the point in
Time quite yet where they’re all focused on just growing that eps growing that profit growing that net income yet but they’re a lot closer to that day than alibaba alibaba is still very much focused on those massive revenue growth in a massive opportunities in front of that company as of right now okay so once again know the category amazon wins it’s very looking
Very good which one is more diversified this one is a very hard one here guys this is a very hard one both companies are very well diversified actually you have amazon which on one hand has the in the amazon platform okay and from that amazon platform you know ton of people selling their ton of seller sell through the amazon platform then on top of that they have
Ads you can place on there for products and services that you sell those those make amazon money you also have twitch which amazon owns you also have amazon web services which is the most exciting and profitability part of their business so they’re definitely a diversified business but when i look at it i gotta say alibaba wins this category okay alibaba has two
Massive platforms over in china which is you know consumers to consumers they also have platforms that are huge for business to consumers they also have the biggest platform as far as business-to-business they also have a ton of different media outlets and whatnot that so this is a company that you know and then they have aliexpress which obviously is more of a
China to international type business they have so many businesses also they have a big huge ownership stake in in ali pay which is owned by a company named ant financial which i have a huge ownership stake in so they have so they’re they’re more diversify at the end of the day although amazon is definitely very versatile it’s not as diversified as alibaba it’s
One of the most diversified businesses literally the entire world i would say the when i think about diversify business models are there a few that come to mind alibaba tencent and berkshire hathaway owned by warren buffett okay those three companies are the first ones that come to my mind when i think about the most diversified business models you could possibly
Invest in all right all right which one has an overall bigger opportunity for this category i give it to alibaba and let me explain why i believe alibaba has a bigger opportunity to continue to expand over the next 5-10 years then amazon so amazon i think will continue to grow into the future okay i do you generally feel like it’s a little overvalued right now we’ll
Go into n just a second but in terms of amazon they should grow for a long time in the future and a very nice growth rates all right double-digit growth for a long time in the future but when i look at alibaba look at a company that’s growing you know revenue 60% right now right this is a company that is a chinese based company that has all the advantage of 1.3
Billion people all right amazon’s home market and unbelievably competitive okay it’s a market that has a lot of a lot of people that are doing very well okay a lot of people making you know 40 50 plus thousand a year whereas china not nearly as many make 40 50 plus thousand a year however when you look at the way the middle class is coming up in china right now and
When you think about 1.3 billion people just in its home market versus 300 ish million here in the united states of america which is amazon’s home market if you’re just looking at from that perspective that’s a massive advantage to alibaba also alibaba has a great chance to probably win some of the other huge regions around around asia and whatnot whereas amazon’s
That’s a little more foreign territory for them so when i look at it from that perspective and then i look at it from also the perspective that alibaba is more diversified as a business model and they have more things that they can pull for growth lovers in the future for that reason i have to give overall bigger opportunity to alibaba then amazon but once again
I think amazon will grow for a long time in the future at double-digit clips i just think alibaba is gonna grow at a faster clip over the next five to ten years then amazon will ultimately okay so yeah alibaba is a bigger opportunity and then lower forward p/e baba wins this one by a mile and it’s not even really close amazon right now trades at a four p in the
70s whereas alibaba right now trades at a four p in the 20 so they’re not even really comparable there and the so the the thing i love about that right is that you’re getting a business model that’s actually growing faster the revenue growth is actually much faster in amazon right now but it’s actually you’re getting the business model for up for a lower forward
P/e than what you’re getting amazon for okay obviously amazon kind of is always going to maybe trade a little higher as far as their valuation then something like alibaba just because once again there’s that trust factor and there’s this factor that fund managers just understand the business model because obviously amazon’s here in the united states and what done
So from that perspective you know you can make an argument that amazon always will command a higher p/e than something like alibaba but right now it’s a dramatic difference like i said over seventy plus for amazon whereas we’re in the 20s right now for baba so i feel amazon’s a little over value too from where it’s at i feel like it’s gonna grow for a long time
In the future i’m very bullish on amazon and in terms of where i think the company’s going the future but in terms of the short term right now i feel like it’s an overvalued business model i don’t think it should be trading at a forward p/e in the 70s right now if you look at the current p it’s a hundred in oh my gosh that’s one hundred and sixty or whatever okay
Super-high for p is what i paid more attention to i think the ford p on amazon should be more in the 40 to 50 range right now they’re growing profits unbelievably well but trading at 78 or whatever ford p that’s a little too high so when i look at it all in total we see that baba ends up winning four categories amazon wins three categories and obviously they tied
On the leadership category but i want to know your guy’s opinion on this which stock do you prefer alibaba or do you prefer amazon which one do you think is a better deal which one do you think is going to do better in terms of the stock performance in the business underlying fundamentals over the next five to ten years i would really love to hear from you guys
In that comment section as always thank you for watching have a great day
Transcribed from video
AMAZON VS ALIBABA – BUY BOTH STOCKS NOW? By Financial Education
