Dear Reader,
When Amazon invests $144 million in a small startup, and agrees to buy $650 million of its products, you know something big is on the horizon.
The target?
A recently public company with a revolutionary AI technology that's used by 80% of AI servers.
This is not just another tech company - it's the backbone of the next generation of AI chips, crucial for giants like Nvidia, Microsoft, and Google.
Click here to see why this company could see a 4,735% revenue surge in the next 12 months.
Good investing,
Alexander Green
Chief Investment Strategist, The Oxford Club
If Emerging Markets Outperform, This Stock Could Lead the Charge
Authored by Ryan Hasson. Article Posted: 1/11/2026.
Quick Look
- A weakening U.S. dollar and potential rate cuts have fueled strong emerging-market performance, with EEM up more than 34% over the past year and seeing steady institutional inflows.
- Alibaba stands out as a concentrated emerging-market play, showing a constructive technical setup after holding key support near $150 and setting up for a potential breakout above $160.
- With reasonable valuation, bullish analyst targets, and accelerating AI and cloud investment, Alibaba could reemerge as a leader if emerging-market momentum continues.
Over the past 12 months, the U.S. dollar has weakened notably, and with additional rate cuts still possible, that trend may persist against several major emerging-market currencies. That shift has helped fuel a strong rally across emerging market equities, with the iShares MSCI Emerging Markets ETF (NYSEARCA: EEM) surging more than 34% over the last year. While pullbacks within any broader trend are inevitable, continued dollar weakness could further encourage capital rotation into emerging markets as U.S. investors look to diversify beyond domestic equities.
For broad exposure, EEM remains one of the most widely used and liquid vehicles for accessing the theme. The ETF tracks the MSCI Emerging Markets Index, providing exposure to large- and mid-cap equities across countries such as China, Taiwan, India, Brazil, and South Korea. It also offers a modest income component, with a dividend yield of 2.1%. Institutional positioning suggests confidence in the trend as well, with roughly $5.5 billion in inflows over the past 12 months compared with about $3 billion in outflows.
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While EEM is well-suited for investors seeking diversified exposure, some may look for a more aggressive way to express a bullish view on emerging markets. That often means concentrating on individual stocks rather than relying solely on an ETF. One name in particular, which carries a 3.16% weighting in EEM, stands out for its technical positioning.
Alibaba: A Potential Emerging Markets Leader
Alibaba Group Holding (NYSE: BABA) remains one of the most influential companies within the emerging markets universe. The Chinese multinational technology and e-commerce giant commands a market capitalization of roughly $368 billion and plays a central role across online retail, cloud computing, logistics, and digital payments.
From a technical standpoint, BABA presents a compelling setup. After breaking out to new 52-week highs last September, the stock pulled back in a controlled, constructive manner. Importantly, shares found support near the $150 area, which had previously acted as resistance. That successful retest suggests the stock may be forming a higher low within a developing longer-term uptrend. A sustained move above $160 would likely confirm the next leg higher and could attract renewed momentum-driven flows, particularly if emerging markets continue to outperform broadly.
Fundamentally, valuation appears reasonable relative to Alibaba's scale and long-term growth profile. The stock trades at roughly 21 times trailing earnings and about 17 on a forward P/E basis. Analysts remain bullish, with a consensus price target of $191.84, implying 24% upside from current levels.
Institutional flows, however, tell a more nuanced story. During the third quarter of last year, institutions were net sellers, unloading roughly $29 billion in stock while buying just under $4 billion. Much of that selling came after a sharp rally from March lows near $80 to a September peak just below $193, suggesting profit-taking rather than a significant fundamental shift in outlook. The key question now is whether capital will rotate back into the name if emerging-market momentum remains intact.
AI and Cloud as the Next Catalyst
One potential catalyst lies in Alibaba's expanding AI and cloud initiatives. Recent reports indicating that select Chinese companies, including Alibaba, may gain access to NVIDIA's H200 chips for commercial use could provide a meaningful tailwind.
While Alibaba's core e-commerce business has faced pressure from discount-focused competitors, its AI-driven cloud segment continues to grow rapidly. Alibaba Cloud controls nearly one-third of China's AI cloud market, and the company has committed over $50 billion over the next three years toward cloud and AI infrastructure.
If emerging markets continue to attract capital and Alibaba can reclaim and sustain key technical levels, the stock could be well-positioned to lead the next phase of outperformance within the space.
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