To The Moon

$Alibaba(BABA)$ $MEITUAN(MPNGF)$ The market is buzzing as September 2025 unfolds, with Alibaba (BABA) soaring 12% to $142.30 after a stellar earnings report, while Meituan-W (03690) slumped to HK$92.90 following a profit warning and an 89% net profit drop. Wednesday’s earnings from Meituan revealed intense competition eroding margins, yet CEO Wang Xing’s bold claim—“In a big competition, being the underdog is the most exciting position to be in”—ignites debate. With BABA riding a major trend and Meituan eyeing a comeback, investors face a pivotal choice. Should you chase BABA’s momentum or bet on Meituan’s resilience? This deep dive explores the stakes, risks, and rewards, backed by data and market shifts.

Market Context: A Tale of Two Giants

As of September 1, 2025, the S&P 500 sits at 6,512.34, with the Nasdaq at 21,918.45, fueled by a 100% probability of a 25-basis-point rate cut this month per CME Fedwatch. Oil hovers at $74.50/barrel, and the VIX at 14.12 signals calm, but geopolitical tensions (Israel-Iran conflict) and Trump’s 50% tariff threat on India add uncertainty. China’s tech sector is split:

• BABA’s Rise: Alibaba’s Q2 2025 earnings showed a 26% cloud revenue jump and AI product surge, pushing its market cap to $360 billion. The stock’s 170% YTD gain reflects investor confidence in its pivot from price wars.

• Meituan’s Struggle: Meituan’s Q2 profit plunge to HK$3.9 billion from HK$35.8 billion last year stems from a 49% rise in user incentives outpacing 15% revenue growth. Its market cap dipped to $110 billion, down 13% this week.

• Industry Shift: The trio (BABA, Meituan, JD.com) pledged to end “disorderly competition” in August, but Meituan’s logistics costs rose 27%, hinting at a tougher road ahead.

• X Sentiment: Posts lean toward BABA’s “AI edge” but see Meituan as a “value trap” with upside potential if margins stabilize.

This sets the stage for a classic trend vs. underdog showdown.

Why Bet on BABA’s Major Trend?

Alibaba’s momentum offers a compelling case:

• Earnings Edge: Q2 revenue hit ¥941.2 billion ($130 billion), with cloud and AI up triple digits, beating estimates by 2%. Operating income fell 3% to ¥35 billion, but cash reserves of ¥145 billion signal strength.

• Technical Strength: BABA broke $135 resistance, with support at $140 and a target of $150 (5-6% upside). RSI at 70 suggests overbought conditions but no immediate reversal.

• Market Fit: With Nvidia up 170% YTD and AI driving $300 billion in projected growth by 2030, BABA’s cloud pivot aligns with the trend. A rate cut could push it to $160 if PCE data (due Friday) cools inflation to 0.5%.

• Risk-Reward: Low downside risk (support at $140) and 5-10% upside make it a “safe” play, especially with institutional buying ($450 million in ETFs this week).

• Catalyst Watch: Partnerships with JD.com and Meituan to stabilize food delivery margins could boost BABA’s quick commerce (14.8 billion yuan revenue, +12% YTD).

BABA’s trend is a bet on stability, but its upside may cap at 10-15% unless AI surprises.

Why Back Meituan’s Underdog Comeback?

Meituan’s underdog status hides potential:

• Earnings Insight: Despite the 89% profit drop, revenue rose 11.6% to HK$93.6 billion ($12.9 billion), beating expectations. The 5.7% core margin (down from 19%) signals room for recovery if competition eases.

• Technical Play: Meituan hit support at HK$92, with resistance at HK$100 (7-8% upside). A break above HK$95 could trigger a rebound, with RSI at 30 indicating oversold conditions.

• Underdog Appeal: Wang Xing’s strategy focuses on 30,000 Instashopping warehouses (up from 8,000 in May), cutting delivery costs. Overseas trials in Saudi Arabia (Keeta) hint at global growth, unlike BABA’s China-centric focus.

• Risk-Reward: High risk (potential 10-15% further drop to HK$80 if losses persist) but 20-30% upside if margins rebound to 10% by year-end, per analyst targets. The low P/E of 8x vs. BABA’s 18x suggests undervaluation.

• Catalyst Watch: A truce in price wars and holiday demand (October travel up 15% YTD) could lift Meituan. X posts note “underdog bounce” if Beijing stimulus kicks in.

Meituan’s comeback hinges on execution, offering higher reward but greater volatility.

Trading Opportunities: Trend vs. Underdog

Here’s how to play both:

• BABA Bullish: Buy at $142, target $150, stop at $140. A 5-6% gain if AI momentum holds. Add $150 calls (September expiry) for 100-150% leverage on a $5 move.

• Meituan Value: Buy at HK$92, target HK$100, stop at HK$88. A 7-8% gain if margins stabilize. Add HK$95 calls for 120-180% upside on a HK$5 rebound.

• Hedged Play: Split 60% BABA ($142 entry, $150 target) and 40% Meituan (HK$92 entry, HK$100 target), with stops at $140 and HK$88. Balance trend stability with underdog upside.

• Options Kick: Buy $145 BABA puts or HK$90 Meituan puts as hedges if tariff news (50% India threat) spikes volatility.

My Trading Plan: Balancing the Odds

I’m splitting my capital to ride both waves. I’ll buy BABA at $142, targeting $150, with a $140 stop, capturing AI and rate-cut momentum. I’ll add Meituan at HK$92, targeting HK$100, with an HK$88 stop, betting on an underdog rebound if holiday demand or stimulus hits. I’ll hold 20% cash for a dip to $130 (BABA) or HK$85 (Meituan) if tariffs escalate. I’ll watch PCE data and Meituan’s logistics updates closely—any margin improvement could shift the tide.

Key Metrics

The Bigger Picture

September 1, 2025, pits BABA’s AI-driven surge ($142.30, +12% post-earnings) against Meituan’s underdog grit (HK$92.90, -13% after a profit plunge). A rate cut (100% odds) could lift BABA to $150 (5-6%) with low risk, while Meituan’s 20-30% upside hinges on margin recovery and holiday demand. Tariff threats and China’s stimulus talks add volatility—BABA’s trend offers safety, but Meituan’s undervaluation tempts risk-takers. The choice depends on your appetite: chase stability or bet on a comeback. What’s your move—BABA’s wave or Meituan’s fight?

Which side are you betting on? Drop your thoughts below! 🎯

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📝 Disclaimer: This post is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.

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