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Alibaba stock up 60% from record low on improved earnings forecast

In today’s top stories, Alibaba stock climbs from 52-week low on improved earnings estimates, Amazon’s bet on Grubhub boosts Just Eat shares and Chinese semiconductor stocks rise after the US pushes ASML to halt sales to China. Meanwhile, Ray Dalio’s flagship fund gains 32.2% since the start of the year and CNBC sets out its stock picks likely to rebound in H2. 

Alibaba surges 60%

Chinese ecommerce giant Alibaba [9988.HK] has been stirring from its slumber. Having set a 52-week low of HK$71 in March, it closed on 6 July at HK$117. According to Bloomberg, brokerages are reiterating their bullish calls on the stock and expect further gains to come. The consensus estimate for its forward earnings has increased by 7% from a three-year low in May. The stock has also been helped by speculations that China’s tech crackdown is coming to an end.

Amazon takes a bite out of Grubhub

When Grubhub+ launched in 2020, it was described by the Motley Fool as “the Amazon Prime of food delivery”. Now, Amazon [AMZN] has taken a bite out of Grubhub by buying a 2% stake in the US firm with an option of increasing it to 15%. Just Eat Takeaway [JET.L] acquired the US food delivery company for $7.3bn in June last year but has already been facing investor pressure to cut ties. Just Eat stock climbed the highest in almost four years in response to the news, opening 11% higher on Wednesday 6 July.

CNBC’s rebound picks

With global equities beaten down, investors will be hoping they make a comeback in the second half of the year. CNBC Pro has screened the MSCI Index for opportunities. Stocks had to have fallen 20% in the first half, have an average upside of 20% or more and are expected to grow their earnings per share by at least 20% this year. The list includes Tesla [TSLA], Blackstone [BX] and Broadcom [AVGO].

Chinese chipmakers rise on ban report

News that the US is considering pushing the Netherlands to ban ASML [ASML] from selling essential semiconductor technology to China sent the share prices of Chinese chipmakers higher on Wednesday. Kingsemi [688037.SH] jumped 7.5% and Piotech [688072.SH] almost 16.9%. Investors are hopeful that a ban could potentially boost domestic production, but Chinese foreign ministry spokesperson Zhao Lijian has likened it to “tech-terrorism”. 

Bridgewater’s flagship fund gains

Billionaire investor Ray Dalio’s flagship hedge fund Pure Alpha II posted gains of 32.2% in the first six months of 2022. The fund has outperformed the broader market by pouring money into asset classes including normal bonds, interest rates, commodities and developed market currencies, reported Bloomberg. The fund has an annualised return of 11.4% since its inception in 1991. 

Vodafone eyes up the metaverse

Indian telecoms operator Vodafone Idea [IDEA.NS] has seen its share price tumble 45% year-to-date through 6 July, but its CMO, Avneesh Khosla, is “keenly following [metaverse] technology to see how it evolves”. There’s “potential to deeply engage with consumers and enhance their digital experience,” he added. Though in its infancy, the metaverse promises to be lucrative and if the Vodafone Idea can tap into this, it could help reduce co-parent Vodafone’s [VOD.L] debt pile. 

Three more metaverse plays

Credit Suisse head of global sector research, Manish Nigam, believes the tech companies that fail to embrace the metaverse will lose out to those who do. Meta [META] CEO Zuckerberg has helped pushed the metaverse to the forefront of investors’ minds, but Roblox’s [RBLX] metaverse ambitions is helping it to display young “tech giant” potential, and Tencent [0700.HK] is tipped to lead China’s charge.

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