3 Reasons to Hold Alibaba Stock Despite Its High Premium P/S

Alibaba Group BABA continues to trade at a premium price-to-sales multiple relative to its sector, a valuation gap that has left investors debating whether the stock still deserves a place in growth portfolios or whether a better entry point lies ahead. BABA is currently trading at a forward 12-month price-to-sales ratio of 1.64, above the Zacks Retail-Wholesale sector's average of 1.42. The company carries a Value Score of C. Rather than chasing the stock at current levels or exiting altogether, the more balanced approach for existing shareholders is to hold, anchored not in near-term price action but in the structural shifts underway across Alibaba's cloud, e-commerce and AI businesses. Three fundamental threads support this stance.