Best Stocks to Buy Now: Alibaba vs. Tencent – Which Chinese Tech Giant Has More Upside?

Alibaba (NYSE: BABA) and Tencent (OTC: TCEHY) remain two of China’s dominant tech players. Alibaba controls the country’s leading e-commerce marketplaces and a top cloud platform, while Tencent owns the ubiquitous WeXin “super app” and the world’s largest video game publisher.

Both are pushing aggressively into AI ecosystems with large language models, generative tools, and autonomous driving tech.

These giants might seem like reliable ways to play China’s long-term growth. Yet over the past five years, Alibaba has lost nearly 40% while Tencent gained just 6%. Regulatory crackdowns, cooling economic expansion, and U.S.-China tensions dulled their shine.

As we enter 2026, which—if either—deserves a spot among the best stocks to buy now?

Alibaba: Growth Slows, But Stability Emerges

Alibaba generates most revenue from Taobao and Tmall. Its cloud unit provides a smaller but growing slice.

2021 antitrust measures forced Alibaba to end exclusive merchant deals and aggressive promotions, weakening defenses against PDD Holdings (PDD) and JD.com (JD).

To offset domestic pressure, Alibaba expanded overseas marketplaces (Lazada, Trendyol, AliExpress) and logistics arm Cainiao—though these lower-margin businesses compress profitability.

Analysts forecast 8% revenue and 11% EPS CAGR from fiscal 2025–2028. High-growth days are behind it, but AI-driven recommendations, merchant tools, and cloud expansion could stabilize core operations.

Tencent: Steady Growth with Defensive Moats

Tencent’s engine is WeXin (~1.41 billion MAUs), bundling messaging, payments, gaming, and more. Its gaming portfolio includes global hits like Honor of Kings and PUBG Mobile.

Regulatory curbs on new titles and minor playtime limits slowed gaming growth. Tencent counters by expanding fintech (Wexin Pay, Tencent Cloud) and overseas games.

AI upgrades to ads and enterprise features support stabilization. Analysts expect 11% revenue and 15% EPS CAGR from 2024–2027.

Wexin’s irreplaceable role in daily Chinese life provides a stronger moat than Alibaba’s competitive e-commerce arena.

Valuation Comparison: Which Is the Better Buy?

Alibaba trades at ~17x forward earnings; Tencent at ~20x. Alibaba looks cheaper on paper, but slower growth and tougher competition weigh on the multiple.

Tencent’s higher valuation reflects superior stability and defensive qualities- remains essential even in regulatory headwinds.

Both could benefit from easing U.S.-China tensions, but Tencent appears the more reliable compounder.

The Verdict: Tencent Edges Out as a Top Pick

Among the best stocks to buy now for exposure to Chinese tech, Tencent stands out for its resilient ecosystem, consistent execution, and broader diversification.

Alibaba offers value and AI/cloud upside but faces steeper near-term challenges.

For balanced portfolios seeking growth with defensive traits, Tencent merits stronger consideration in 2026—provided macro risks don’t escalate further.