BABA vs TME Stock Comparison: AI Score, Valuation, Performance and Upside
BABA and TME are both US-listed Chinese internet companies of very different scope. Alibaba spans marketplaces, logistics, and a cloud business central to China's AI build-out, with corresponding scale and capital intensity. Tencent Music is a focused subscription business converting Chinese listeners into paying users, with rising margins and a declining legacy social entertainment segment.
Use this BABA vs TME comparison to choose between breadth and focus in Chinese internet exposure. Alibaba is the diversified bet on Chinese consumption and cloud computing, with heavy AI spending in the near term. Tencent Music is a narrower story about subscription penetration and pricing in music, with a simpler set of drivers.
BABA holds the edge across 3 of 5 key metrics in this comparison. BABA has delivered stronger 1-year price return (-36.89% vs -63.43%), though TME has the better forward P/E setup (1.24x vs 1.78x for BABA). On fundamentals, BABA is growing revenue faster (8.60%), while TME maintains the higher operating margin (29.18%) — a classic growth-versus-profitability split. Analyst consensus implies meaningfully more upside for BABA (+68.76%) than for TME (+56.95%).
Human Wall Street analysts' price targets, typically implying a ~12-month view — a separate signal from this site's own AI Prediction Signal further down the page, which is a 5-/30-day machine-learning forecast based on price history alone.
- Want broad exposure to Chinese commerce plus a leading domestic cloud business
- Believe AI infrastructure investment will produce a durable cloud advantage
- Value large buybacks and substantial cash generation
- Accept consumption risk, heavy capital spending, and offshore structure considerations
- Want a focused music subscription business with expanding margins
- Believe paying subscriber penetration and pricing have further to run
- Prefer a simpler set of drivers than a diversified conglomerate
- Accept social entertainment decline, licensing costs, and China-specific risks
| Metric | BABA | TME |
|---|---|---|
| AI scorei | 40.5 | 25.1 |
| AI ranki | #1057 | #2813 |
| Latest closei | $109.74 | $8.39 |
| 1M returni | -8.42% | -4.66% |
| 6M returni | -9.73% | -8.64% |
| 1Y returni | -36.89% | -63.43% |
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | BABA | TME |
|---|---|---|
| 1Y ago | $6.37K (-36.3%) started 2025-09-25 | $3.75K (-62.5%) started 2025-09-25 |
| 5Y ago | $8.27K (-17.3%) started 2021-09-27 | $12.8K (+28.0%) started 2021-09-27 |
| 10Y ago | $11.73K (+17.3%) started 2016-09-26 | $6.6K (-34.0%) started 2018-12-12 |
Hypothetical — past performance does not guarantee future results.
| Metric | BABA | TME |
|---|---|---|
| Market capi | $272.85B | $13.67B |
| Trailing P/Ei | 24.83 | 9.87 |
| Forward P/Ei | 1.78 | 1.24 |
| Price/Salesi | 0.26 | 0.40 |
| EV/Revenuei | 0.19 | 0.09 |
| Analyst targeti | $185.20 | $13.17 |
| Target upsidei | +68.76% | +56.95% |
| Metric | BABA | TME |
|---|---|---|
| Revenue growthi | 8.60% | 5.80% |
| Earnings growthi | -79.40% | 2.40% |
| EPS growthi | -79.40% | +2.40% |
| FCF margini | -7.91% | +21.03% |
| Operating margini | 7.29% | 29.18% |
| Profit margini | 7.04% | 26.28% |
| ROIC proxyi | 6.36% | 10.97% |
| Return on equityi | 6.36% | 10.97% |
| Dividend yieldi | 0.96% | 2.86% |
| Payout ratioi | 24.04% | 29.00% |
| Dividend growth streaki | 2 yrs | 1 yr |
| Betai | 0.50 | 0.82 |
| Debt/equityi | 23.93 | 20.83 |
| Current ratioi | 1.36 | 1.75 |
| Quick ratioi | 0.72 | 1.57 |
Over the past year, BABA and TME have moved weakly in the same direction (correlation of 0.35), based on daily returns.
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | BABA | TME |
|---|---|---|---|
| 1Y | Growthi | -36.89% | -63.43% |
| CAGRi | -36.90% | -63.46% | |
| Volatilityi | 42.07% | 46.62% | |
| Sharpe ratioi | -1.00 | -2.01 | |
| Sortino ratioi | -1.45 | -2.33 | |
| Max drawdowni | 49.47% | 66.42% | |
| Current drawdowni | 41.51% | 63.70% | |
| Avg drawdowni | 26.08% | 42.78% | |
| Ulcer Indexi | 28.77% | 47.87% | |
| Max daily dropi | 8.57% | 24.65% | |
| Max wkly dropi | 15.43% | 33.93% | |
| 5Y | Growthi | -22.35% | +21.93% |
| CAGRi | -4.94% | +4.05% | |
| Volatilityi | 51.48% | 58.84% | |
| Sharpe ratioi | 0.06 | 0.28 | |
| Sortino ratioi | 0.10 | 0.44 | |
| Max drawdowni | 64.46% | 69.77% | |
| Current drawdowni | 41.51% | 67.32% | |
| Avg drawdowni | 39.90% | 26.45% | |
| Ulcer Indexi | 42.73% | 33.63% | |
| Max daily dropi | 12.51% | 24.65% | |
| Max wkly dropi | 25.12% | 33.93% | |
| 10Y | Growthi | +10.13% | -37.12% |
| CAGRi | +0.97% | -5.78% | |
| Volatilityi | 43.69% | 56.07% | |
| Sharpe ratioi | 0.13 | 0.09 | |
| Sortino ratioi | 0.20 | 0.14 | |
| Max drawdowni | 80.09% | 90.19% | |
| Current drawdowni | 63.23% | 72.31% | |
| Avg drawdowni | 39.65% | 52.72% | |
| Ulcer Indexi | 48.43% | 58.59% | |
| Max daily dropi | 13.34% | 27.08% | |
| Max wkly dropi | 25.12% | 34.11% |
| Category | BABA | TME |
|---|---|---|
| Company | Alibaba Group Holding Limited | Tencent Music Entertainment Group |
| Sector | Consumer Discretionary / E-Commerce & Cloud | Communication Services / Streaming Audio |
| Industry | Internet Retail | Internet Content & Information |
| Core business | Chinese technology group operating the Taobao and Tmall commerce marketplaces, international commerce platforms, logistics, local services, and a large cloud computing business now investing heavily in artificial intelligence infrastructure. | Leading online music platform in China, operating music streaming apps with paying subscriptions alongside a social entertainment business including live streaming and online karaoke. |
| Investor focus | China commerce customer management revenue, cloud revenue growth and AI-related demand, capital expenditure levels, international commerce losses, and buybacks. | Paying subscriber additions, average revenue per paying user, music subscription revenue growth, social entertainment decline, and margin expansion. |
- Dominant scale in Chinese online marketplaces with deep merchant relationships
- Cloud business is a leading provider in China and a direct beneficiary of AI demand
- Generates substantial cash and has returned capital through large buybacks
- Leading position in Chinese music streaming with a large and growing paying subscriber base
- Subscription revenue growth and price increases have lifted margins substantially
- Backed by a major technology group providing distribution and content relationships
- Chinese consumption growth and competitive intensity from other commerce platforms
- Heavy AI infrastructure spending compresses near-term free cash flow
- Holders of US-listed shares own an offshore structure, not direct equity in the Chinese operating companies
- The social entertainment segment has declined, offsetting music growth
- Music content licensing costs depend on negotiations with major rights holders
- Same offshore structure and China regulatory considerations as other US-listed Chinese companies
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