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Qualcomm to Expand Into Data Centers With Alphawave Semi Buyout

Qualcomm to Expand Into Data Centers With Alphawave Semi Buyout

Globe and Mail11-06-2025
Qualcomm Incorporated QCOM has inked a definitive agreement to acquire Alphawave Semi for an enterprise value of approximately $2.4 billion. The transaction, subject to the fulfillment of closing conditions and other mandatory regulatory approvals, is likely to be completed in the first quarter of 2026. The deal will offer Qualcomm an opportunity to expand its presence in high-growth applications, including data centers, artificial intelligence (AI), data networking and data storage.
With advanced technology solutions that are complementary to power-efficient CPU and NPU cores, Alphawave Semi delivers connectivity products and chiplets that drive faster, more reliable data transfer with higher performance and lower power consumption for 5G wireless, AI and data center applications. The acquisition of this U.K.-based chip firm will likely enable Qualcomm to be the driving force of the next wave of AI innovation.
In April, Qualcomm acquired MovianAI, the former generative AI division of VinAI, a prominent Vietnam-based AI company. The acquisition provided Qualcomm access to VinAI's comprehensive expertise in generative AI, machine learning, computer vision and natural language processing, significantly accelerating its fundamental AI research. The integration of VinAI's portfolio with Qualcomm's extensive R&D expertise facilitated the development of state-of-the-art AI-driven solutions for a wide range of industries, including smartphones, PCs, software-defined vehicles and more.
Other Tech Firms Focusing on AI Chips
Intel Corporation INTC has launched the Intel Core Ultra (Series 2) processors engineered to redefine mobile computing for a wide range of use cases such as gaming, content creation, IT applications and various other businesses. This state-of-the-art lineup brings significant advancements in AI capabilities, improved performance and efficiency, setting new standards for AI computing. Intel has also introduced a new lineup of leading-edge processors to support AI workloads for edge devices. The Intel Core Ultra processors offer greater scalability, energy efficiency and impressive performance at the edge for a diverse range of use cases such as industrial IoT, autonomous vehicles and more.
Advanced Micro Devices, Inc. AMD has strengthened its position in the semiconductor market on the back of its evolution as an enterprise-focused company from a pure-bred consumer-PC chip provider. The latest MI300 series accelerator family strengthens its competitive position in the generative AI space. The accelerator from Advanced Micro is based on AMD CDNA 3 accelerator architecture and supports up to 192 GB of HBM3 memory, enabling efficient running of large language model training (up to 80 billion parameters) and inference for generative AI workloads. Advanced Micro is also benefiting from strong enterprise adoption and expanded cloud deployments.
QCOM's Price Performance, Valuation and Estimates
Qualcomm shares have declined 26.1% over the past year against the industry 's growth of 15.3%.
Image Source: Zacks Investment Research
Going by the price/earnings ratio, the company's shares currently trade at 13.18 forward earnings, lower than 30.77 for the industry and the stock's mean of 17.33.
Earnings estimates for 2025 have decreased 0.17% to $11.8 per share over the past 60 days, while the same for 2026 have declined 4.1% to $12.07.
Qualcomm stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners Up
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Intel Corporation (INTC): Free Stock Analysis Report
QUALCOMM Incorporated (QCOM): Free Stock Analysis Report
Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report
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How the world's most valuable company got caught in the middle of Trump's spat with China
How the world's most valuable company got caught in the middle of Trump's spat with China

CTV News

timean hour ago

  • CTV News

How the world's most valuable company got caught in the middle of Trump's spat with China

Nvidia CEO Jensen Huang delivers the keynote address at the GTC AI Conference in San Jose, California, on March 18. Josh Edelson/AFP/Getty Images via CNN Newsource Nvidia, the world's most valuable company, has found itself caught in the middle of U.S. President Donald Trump's historic trade war with China. The result: an extraordinary concession from a US$4.5 trillion corporation that will give the United States a percentage of every high-end AI chip sold in China. The deal, which AMD also signed for some of its chips, could split the difference between two competing Trump administration goals: maintain America's AI dominance while securing a critical trade agreement with China. It could also give the White House billions of dollars to spend as it wishes. What Nvidia agreed to Nvidia and AMD have agreed to pay the US government 15% of their revenues from semiconductor sales to China in exchange for licenses to export their technology there. The White House in April blocked the export of certain AI chips to China, including Nvidia's H20 chips and AMD's MI308 chips. The deal with the Trump administration allows the companies to obtain export licenses to restart sales of those chips in China, a US official told CNN. The Financial Times first reported the story Sunday. Nvidia previewed the deal last month, when it said it would resume sales of the H20 chip to China after the Trump administration expressed openness to allowing the export of certain AI chips again. But the 15% payment was a surprise. Trump said Nvidia was initially asked to pay a 20% cut, but they negotiated the rate down to 15%. The deal came together after Nvidia CEO Jensen Huang met with President Donald Trump on Wednesday, the official said. Although the export licenses were granted Friday, no shipments have yet been made. 'We follow rules the US government sets for our participation in worldwide markets,' a Nvidia spokesperson said in a statement. 'While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide.' AMD has not responded to CNN's request for comment. How extraordinary is this? Governments, including the United States, have taken control of companies in the past when they were considered to be of strategic importance to national security. During the financial crisis in 2009, the United States took control of General Motors and Chrysler, and the proceeds of those stakes went directly into the US Treasury after the government sold them for a profit. But it's not clear that the US government has ever demanded a percentage of a company's business without taking an equity stake – or if it's even legal to do so. The US Constitution forbids taxes on exports. To get around that, the deal's terms have been structured as a voluntary agreement, so it won't be considered a tax or a tariff, a US official said. Instead, Nvidia and AMD will voluntarily send funds to the US government. The companies will have no say whatsoever on how the US government deploys that money after it is sent. 'It's hard to identify any historical precedent for this sort of arrangement,' said Sarah Kreps, law professor and director of the Tech Policy Institute at Cornell University's Brooks School of Public Policy. What about national security? In recent years, the US government has sought to restrict China's access to advanced American technology in an effort to slow its progress on AI and let the United States get farther ahead. But the White House's reversal on export controls may be an acknowledgement that China is advancing in AI regardless, so American companies might as well be allowed to benefit. It could also give the White House another way to raise revenue for the US government, along with tariffs. 'It seems like there's been some vacillation within the administration about and toward China, and I think that reflects the internal divide within the administration between the China hawks and the economic pragmatists,' Kreps said. 'It seems like increasingly, the economic pragmatists are holding sway.' That approach would align with arguments from Nvidia's Huang, who has said that restricting sales of American AI chips is bad for US national security. Chinese developers could simply undermine US leadership by creating their own alternatives if they can't buy American technology, according to Huang, who has met with Trump repeatedly in recent months. The White House agrees with Huang, believing it's better to have China locked into a US-made chip sold through legitimate channels than to force China to the black market, a US official said. China has been able to subvert existing channels to obtain restricted chips anyway. Why is Trump charging 15%? Big questions remain about where the 15% commission idea emerged and what it could mean for national security. A US official said that the payment allows the administration to maintain control of the export process and bring in revenue for the US government in the process. Still, it's not clear that the penalty for Nvidia and AMD will effectively limit the flow of the chips or erase any potential national security issues. 'If there's a legitimate national security concern about exporting these chips to China, then I don't see how the payments to the US government address those risks. In fact, they don't at all,' said Scott Kennedy, senior adviser and trustee chair in Chinese business and economics at the Center for Strategic and International Studies. 'And if there's not a sufficient national security risk or they can be adequately mitigated … then the US government should just get out of the way and expect nothing in return.' What does this mean for Nvidia? Nvidia released the H20 chip last year as a way to maintain access to the Chinese market — which made up 13% of the company's sales in 2024 — in the face of US export controls imposed by the Biden administration. But the chips are widely believed to have contributed to DeepSeek, an advanced Chinese AI model that shook Silicon Valley upon its release earlier this year, raising concerns that China was further ahead on AI than previously understood. After the Trump administration barred H20 sales to China in April, Nvidia said it took billions of dollars in charges and lost revenue because of the export controls in the first quarter and projected a similar outcome in the second quarter. So, even if it has to fork over 15% of those sales to the White House, resuming shipments of the H20 to China could mean billions more dollars in revenue for Nvidia — which became the first publicly traded company to top $4 trillion in valuation last month. Shares of Nvidia (NVDA) rose as much as 0.5% on Monday. Combined, Nvidia and AMD could earn as much as $35 billion in annual revenue from sales of their H20 and MI380 chips to China, according to CFRA Research analyst Angelo Zino's estimates. That means the White House would earn around $5 billion in revenue. 'We acknowledge the tax will have a negative impact on profit margins tied to China sales but view the reentry into the second-largest GPU market to be worth the cost,' Zino said in emailed commentary Monday. How important are these chips? Trump on Monday called Nvidia's H20 chip 'obsolete,' saying that China 'already has it in a different form.' But some experts disagree with Trump's characterization of the chips. 'These H20s are still state of the art,' CSIS's Kennedy said. Although they're less advanced, in some ways, than other Nvidia chips, 'they also come with elements that make them extremely sophisticated and valuable,' including their memory capabilities. Nvidia's H20 chip is also good at inference, says Param Singh, professor of business technologies and marketing at Carnegie Mellon University, which refers to the process an AI model goes through when answering a question. But Nvidia's H100 and H200 series chips, as well as its Blackwell line of chips, are much more powerful and better equipped to train large language models like OpenAI's GPT-5 he says. It's not the same as calling it obsolete, but using a chip like the H20 instead could mean it might take longer to train cutting edge AI models. 'There's a huge difference in the amount of calculations that an H100 chip could do versus an H20,' he said. Nvidia likely reasoned that there is enough Chinese demand for the chips to make the 15% commission to the White House a worthwhile trade-off for its business, according to Kreps. 'You have to do a calculation based on what was lost from the export controls,' she said. Will Trump approve more advanced chips? Trump on Monday left open the possibility that Nvidia could export its super high-end Blackwell chips for a higher price. The Trump administration had closed the door on the export of that technology to China — even after reversing course on the H20. However, Trump on Monday said that he'd consider allowing Nvidia to sell the Blackwell chip. 'The Blackwell is superduper advanced. I wouldn't make a deal with that, although it's possible,' Trump said. 'I'd make a deal a somewhat enhanced in a negative way. Blackwell, in other words, take 30% to 50% off of it, but that's the latest and the greatest in the world. Nobody has it. They won't have it for five years.' Trump said Huang will return to the White House in the future to discuss selling an 'unenhanced' version of Blackwell. 'I think he's coming to see me again about that, but that will be a unenhanced version of the big one,' Trump said. 'You know, we will sometimes sell fighter jets to a country and we'll give them 20% less than we have.' What does China want? Questions from Beijing about the security of American AI chips also raise uncertainty about just how successful Trump's commission policy could be. China could choose not to buy US tech firm Nvidia's H20 chips, the social media account Yuyuan Tantian, which is affiliated with state broadcaster CCTV, said on Sunday. It claimed that the chips could have 'backdoors' that impact their function and security, following previous similar claims from China's cybersecurity administration. Nvidia has repeatedly denied that its products have backdoors. However, that statement could be less an indication that China won't buy American chips and more a signal to Chinese tech companies to continue innovating in semiconductors even if US shipments do resume, Kennedy said. What does this mean for a broader trade deal? For the Trump administration, the cost-benefit analysis is that it opens up the flow of mid-tier chips to China while giving the administration a key bargaining chip in its ongoing trade talks, a US official said. Treasury Secretary Scott Bessent has called Nvidia export controls a 'negotiating chip' in the larger US-China trade talks. But China knows that, and its posturing over supposed security concerns with the H20 chip this weekend suggests that it won't be won over so easily — even if it wants the chips for its market. By Clare Duffy, Phil Mattingly, Lisa Eadicicco, CNN

2 Stocks to Buy From the Challenging Semiconductor Industry
2 Stocks to Buy From the Challenging Semiconductor Industry

Globe and Mail

timean hour ago

  • Globe and Mail

2 Stocks to Buy From the Challenging Semiconductor Industry

The Zacks Electronics - Semiconductors industry is suffering from macroeconomic challenges, end-market volatility, broad-based inventory correction and growing geopolitical tensions. Tariffs on trade partners, including China, are expected to hurt the industry's prospects. However, industry players are benefiting from the growing proliferation of AI, Generative AI (Gen AI), IoT, Machine Learning (ML) and industrial revolution 4.0 (which focuses on interconnectivity and automation). These have turned out to be boons for industry players like Broadcom AVGO and Applied Materials AMAT. Increasing demand for AI-supportive chips from hyperscalers is a major growth driver. The growing demand for high-volume consumer electronic devices, including digital media players, smartphones, tablets, efficient packaging, machine vision solutions and robotics, should continue to drive the industry's growth. Industry Description The Zacks Electronics – Semiconductors industry comprises companies that provide a wide range of semiconductor technologies. Their offerings include packaging and test services, wafer cleaning, factory automation, face detection and image-recognition capabilities to develop smart and connected products. The industry participants primarily cater to end markets that include consumer electronics, communications, computing, industrial and automotive. The companies are increasing their spending on research and development to stay afloat in an era of technological advancements and changing industry standards. The industry is experiencing solid demand for advanced electronic equipment, which is helping its participants increase their investments in cost-effective process technologies. What's Shaping the Future of the Electronics - Semiconductors Industry? AI Demand Driving Prospects: Industry participants are benefiting from growing demand for advanced manufacturing processes and energy-efficient computing power, both of which are needed to develop AI-supportive chips. AI is gaining popularity thanks to multimodal learning and growing context awareness. The emergence of Gen AI and Agentic AI has further enhanced AI's capabilities, making it a key driver of efficiency, automation and innovation. Significant improvements in computing hardware (GPUs and TPUs) are allowing the development of more complex AI models. The growing number of high-speed data centers worldwide, which require ultra-fast Internet that 5G promises to deliver, is a tailwind. Increased connectivity and use of technology in consumer electronics through IoT, AI, robotics, AR/VR and others further set the momentum for 5G. Smart Devices Aiding Computing Demand: Smart devices need computing and learning capabilities to perform functions like face detection, image recognition and video analytics capabilities. These require high levels of processing power, speed and memory and low power consumption, as well as better graphics processors and solutions, which bode well for the industry. Graphic solutions help increase the speed of rendering images and improve image resolution and color definition. Prospects Around Advanced Packaging Robust: The increasing demand for miniaturization, greater functionality, lower power consumption, and improved thermal and electrical performance are driving the demand for semiconductor packaging and test technologies. The growing requirement for advanced packaging is gaining traction in the semiconductor industry, which is a key catalyst for industry participants. Complex Process Drives Demand: The requirement for faster, more powerful and energy-efficient semiconductors is expected to increase rapidly with the robust adoption of cloud computing, IoT and AI. Semiconductor manufacturers are primarily looking to maximize manufacturing yields at lower costs, making semiconductor manufacturing processes more complex and driving the demand for solutions offered by industry participants. The rapid adoption of IoT-supported factory automation solutions is another contributing factor. Zacks Industry Rank Indicates Dim Prospects The Zacks Electronics - Semiconductors industry is housed within the broader Zacks Computer and Technology sector. It currently carries a Zacks Industry Rank #182, which places it in the bottom 25% of more than 250 Zacks industries. The group's Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bearish near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one. The industry's positioning in the bottom 50% of the Zacks-ranked industries is a result of the negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are optimistic about this group's earnings growth potential. Since April 30, 2025, the industry's earnings estimates for the current year have moved down 3.6%. Given the bearish prospects, there are only a few stocks that you can consider for your portfolio. However, before we present the stocks, let us look at the industry's recent stock-market performance and valuation picture. Industry Outperforms S&P 500 & Sector The Zacks Electronics - Semiconductors industry has outperformed the Zacks S&P 500 composite and surpassed the broader Zacks Computer and Technology sector in the past year. The industry has appreciated 51.5% over this period compared with the Zacks Computer and Technology sector's return of 29.1% and the S&P 500's appreciation of 20.3%. One-Year Price Performance Industry's Current Valuation On the basis of the forward 12-month price-to-earnings ratio, which is a commonly used multiple for valuing electronics semiconductor stocks, the industry is currently trading at 34.32X versus the S&P 500 and the sector's 22.69X and 28.15X, respectively. Over the past five years, the industry has traded as high as 34.32X and as low as 11.05X, with the median being 19.7X, as the charts below show. Forward 12-Month Price-to-Earnings (P/E) Ratio 2 Electronics Semiconductor Stocks to Buy Broadcom: This Zacks Rank #2 (Buy) company is benefiting from strong momentum fueled by growth in AI semiconductors and continued success with its VMware integration. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Strong demand for Broadcom's networking products and custom AI accelerators (XPUs) has been noteworthy. AVGO's AI segment benefits from custom accelerators and advanced networking technology that support large-scale AI deployments with improved performance and efficiency. Broadcom expects third-quarter fiscal 2025 AI revenues to jump 60% year over year to $5.1 billion. The acquisition of VMware has benefited Infrastructure software solutions. As of the fiscal second quarter, roughly 87% of Broadcom's largest 10,000 customers have adopted VMware Cloud Foundation. Broadcom stock has appreciated 31% year to date (YTD). The Zacks Consensus Estimate for AVGO's fiscal 2025 earnings has been steady at $6.63 per share over the past 60 days. Price & Consensus: AVGO Applied Materials: Another Zacks Rank #2 stock, AMAT is benefiting from strength in the Semiconductor Systems, owing to a rebound in the semiconductor industry, particularly in the foundry logic space. Solid momentum in the subscription and display businesses is a plus for Applied Materials. The company's strong position in IoT, Communications, Auto, Power and Sensors (ICAPS) has helped it gain market share. AMAT's diversified portfolio remains its key growth driver. Applied Materials has appreciated 16.2% YTD. The Zacks Consensus Estimate for AMAT's fiscal 2025 earnings has declined by a penny to $9.46 per share over the past 30 days. Price & Consensus: AMAT Zacks' Research Chief Names "Stock Most Likely to Double" Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest. This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%. Free: See Our Top Stock And 4 Runners Up Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Broadcom Inc. (AVGO): Free Stock Analysis Report Applied Materials, Inc. (AMAT): Free Stock Analysis Report

Alibaba vs. Microsoft: Which Cloud Stock to Buy on Better AI Upside?
Alibaba vs. Microsoft: Which Cloud Stock to Buy on Better AI Upside?

Globe and Mail

time2 hours ago

  • Globe and Mail

Alibaba vs. Microsoft: Which Cloud Stock to Buy on Better AI Upside?

Alibaba Group BABA and Microsoft MSFT represent two divergent paths in the global cloud and AI race. While Microsoft dominates Western enterprise computing through Azure and its OpenAI partnership, Alibaba maintains leadership in China's cloud market despite mounting challenges. Both companies have made massive AI commitments that will define their trajectories for years to come. Recent data from Synergy shows Microsoft achieved a 20% share of the global cloud market in second-quarter 2025, while Alibaba won 4% share. The timing for this comparison is critical as generative AI transforms cloud computing economics. Microsoft recently became the second company to surpass $4 trillion in market value following explosive Azure growth, while Alibaba announced a historic $53 billion infrastructure investment even as its stock languishes near decade lows. Let's delve deep and closely compare the fundamentals of the two stocks to determine which one is a better investment now. The Case for BABA Stock Alibaba's ambitious $53 billion cloud and AI infrastructure commitment over three years exceeds its entire past decade of spending, signaling management's recognition that survival depends on AI competitiveness. The company's cloud segment showed tentative recovery with revenues excluding consolidated subsidiaries growing 17% year over year in the fiscal fourth quarter, while AI-related products maintained triple-digit growth for five consecutive quarters. Recent launches, including Qwen-Max, QwQ-Plus reasoning model, and QVQ-Max visual processing, demonstrate technical capabilities, with management claiming performance matching Western rivals. However, these positives cannot mask deepening structural problems. Cloud growth remains sluggish compared to global peers, with public cloud revenues achieving only modest double-digit expansion while Microsoft's Azure rockets at 39%. The pivot toward high-quality revenues disguises market share losses and monetization failures. More troublingly, Alibaba canceled its cloud unit IPO, citing U.S. chip restrictions, exposing critical vulnerability to escalating technology sanctions that could cripple AI ambitions. The company's financial deterioration accelerates despite heavy investment. Free cash flow collapsed 70% year over year due to infrastructure spending and merchant refunds, while adjusted EBITDA declined 5% even as revenues grew. Core e-commerce faces margin compression with customer management revenues crawling at 1% growth. Chinese regulatory uncertainty persists as authorities maintain unpredictable intervention patterns. Alibaba confronts a combination of geopolitical hostility, competitive displacement, and strategic confusion that renders its AI investments potentially worthless. The Zacks Consensus Estimate for fiscal 2026 earnings indicates a downward revision of 10.9% over the past 30 days to $8.58 per share. The market appears to be pessimistic about Alibaba's growth trajectory. The Case for MSFT Stock Microsoft's unprecedented AI momentum validates its position as the definitive platform for enterprise transformation. Azure's remarkable 39% growth, reaching $75 billion annual revenues in the fiscal fourth quarter, demonstrates explosive adoption as organizations embrace AI capabilities at scale. The exclusive OpenAI partnership provides unmatched access to frontier models, while Azure AI Foundry's general availability supporting 1,900+ models establishes Microsoft as the comprehensive AI development ecosystem. Infrastructure leadership through first-to-market Nvidia GB200 deployment, achieving 865,000 tokens per second throughput, creates insurmountable competitive advantages. AI integration across Microsoft's portfolio multiplies growth vectors and deepens competitive moats. GitHub Copilot's evolution to autonomous coding agents, accelerating Microsoft 365 Copilot enterprise adoption, and Dynamics 365 AI enhancements drove commercial bookings past $100 billion. With remaining performance obligations hitting $368 billion, up 37% year over year, Microsoft enjoys extraordinary revenue visibility. The company's execution excellence shows in delivering 18% revenue growth to $76.4 billion while expanding operating margins to 44.9%, demonstrating pricing power that will persist as AI becomes mission-critical. Strategic advantages compound Microsoft's dominance. Leadership in multi-agent orchestration through Copilot Studio, pioneering enterprise AI governance via Entra Agent ID, and establishing industry standards with Model Context Protocol cement architectural control. Azure's 70+ region presence, each AI-optimized with liquid cooling, provides unmatched global scale. Revolutionary services like autonomous SRE Agents and Project Amelie automated ML pipelines position Microsoft years ahead. Microsoft offers unparalleled exposure to AI's transformative potential backed by proven execution and accelerating adoption. The Zacks Consensus Estimate for Microsoft's fiscal 2026 earnings is pegged at $15.32 per share, indicating an upward revision of 2.3% over the past 30 days Valuation and Price Performance Comparison Both stocks carry premium valuations but for opposite reasons. Microsoft's 33.42x forward P/E and 11.92x sales multiple reflect justified confidence in sustained growth, with the stock reaching record highs above $550. Alibaba stock is trading at a 12.92x P/E, masking fundamental deterioration. BABA vs. MSFT: P/E F12M Ratio While Microsoft consistently achieves new highs, Alibaba stock has declined 9.3% over the past three months compared with Microsoft's 15.8% growth. BABA Underperforms MSFT in 3-Month Period Conclusion Microsoft decisively wins this comparison through superior AI execution, dominant positioning, and accelerating momentum. Azure's 39% growth crushes Alibaba's 6% expansion while Microsoft's proven AI monetization contrasts with Alibaba's struggling unit economics. Geographic advantages, regulatory stability, and enterprise trust create sustainable competitive moats that Alibaba cannot overcome despite massive spending. Microsoft's premium valuation reflects genuine growth while Alibaba's discount signals existential risks. Investors should buy Microsoft to capture AI's generational opportunity and sell Alibaba to avoid deteriorating fundamentals, regulatory uncertainty, and strategic displacement threatening permanent capital impairment. MSFT currently carries a Zacks Rank #2 (Buy), whereas Alibaba has a Zacks Rank #5 (Strong Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. See our %%CTA_TEXT%% report – free today! 7 Best Stocks for the Next 30 Days Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Microsoft Corporation (MSFT): Free Stock Analysis Report

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