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For a brief moment on Tuesday, Alibaba was again the world’s biggest e-commerce firm by market cap. Shares of the Chinese behemoth have been heading steadily upward for two years, after relinquishing the top spot in 2015.
Shares jumped 0.5% in New York trading Tuesday, while Amazon dipped 0.4%. Amazon ended the day back on top. The two kept pace with each other on Wednesday, both finishing up around 0.8%.
Investors’ increased confidence in Alibaba comes as its revenue growth continues to outpace its stock price, with some even expecting revenue to double next year from 2016.
The company is still riding the wave of an explosion in spending by China’s ballooning middle class, and has their sight set on significantly bigger and better things. Their growth strategy revolves not just around growing its e-commerce retail, which it hopes will reach US$1 trillion by 2020, but also in other areas such as cloud computing and fintech.
Aliyun, the company’s cloud computing and big data unit, as well as financial services such as Alipay and investments in fintech are allowing Alibaba to continually increase the scale of its data operations. The push into new frontiers also fits in nicely with the Chinese government’s priorities of harnessing new technologies and the internet of things to drive the restructuring of China’s economy.
Alibaba is set to put its revenue to work in the next few years, with plans to boost R&D by a total of US$15 billion over the next three years, roughly doubling its expenditures by 2018. Along with other Chinese tech firms, Alibaba currently spends significantly less than US counterparts in the area.