Alibaba is expected to continue to generate strong free cash flow in 2024, despite facing a number of challenges, including a potential global economic slowdown, rising inflation, and supply chain disruptions.

Alibaba is the world’s largest e-commerce company and one of the largest tech companies in the world. The company has a strong track record of generating free cash flow, and this is expected to continue in 2024.

Analysts are expecting Alibaba to generate around $32 billion in free cash flow in 2024, up from $29.18 billion in 2023. This growth in free cash flow is expected to be driven by a number of factors, including:

Growth of Alibaba’s core e-commerce business: Alibaba’s core e-commerce business is expected to continue to grow in 2024. This growth will be driven by the increasing penetration of e-commerce in China and the growing demand for Alibaba’s products and services from consumers and businesses.
Growth of Alibaba’s cloud computing business: Alibaba’s cloud computing business is also expected to continue to grow in 2024. This growth will be driven by the increasing demand for cloud computing services from businesses of all sizes.
Growth of Alibaba’s international business: Alibaba is also expanding its international business. This expansion is expected to generate additional free cash flow for the company in 2024.
Despite the expected growth in free cash flow, Alibaba is facing a number of challenges in 2024, including:

Potential global economic slowdown: There is a growing concern that the global economy may slow down in 2024. This would lead to a decrease in consumer spending, which would hurt Alibaba’s revenue growth.
Rising inflation: Inflation is rising in many countries around the world, including China. This is leading to higher prices for consumers and businesses. Higher prices could lead to a decrease in consumer spending and business investment, which would hurt Alibaba’s revenue growth.
Supply chain disruptions: Supply chain disruptions are continuing to impact businesses around the world. These disruptions are making it difficult for companies to get the products and materials they need. Supply chain disruptions could lead to product shortages and higher prices, which would hurt Alibaba’s revenue growth.
Despite these challenges, Alibaba is expected to continue to generate strong free cash flow in 2024. The company has a strong track record of generating free cash flow, and its core e-commerce business is expected to continue to grow. Alibaba is also investing heavily in its cloud computing and international businesses, which are also expected to generate significant free cash flow in the future.

What are the implications for investors?

Investors who are considering investing in Alibaba should carefully consider the expected growth in free cash flow, as well as the challenges that the company is facing. Alibaba is a well-managed company with a strong track record, and it is well-positioned to weather the current challenges. However, investors should be aware of the risks involved and should carefully monitor the company’s performance.

Conclusion

Alibaba is expected to continue to generate strong free cash flow in 2024, despite facing a number of challenges. The company’s strong free cash flow generation is a key competitive advantage that gives it the ability to invest in new growth areas, financial flexibility, and the ability to return capital to shareholders.