Alibaba's (BABA  ) fourth-quarter results beat expectations on the top and bottom line primarily due to e-commerce sales and cloud computing. The company's marketplace platform generated $13.2 billion for the quarter, a 19% increase from last year.

Alibaba noted a strong drop in March but said activity on its platform has nearly returned to pre-pandemic levels. Gross merchandise volume is back to growth rates last seen in December before the coronavirus forced an aggressive shutdown of the country. China is ahead of the curve in terms of controlling the coronavirus and reopening the economy, and Alibaba's results show that business activity is coming back.

Some Alibaba units showed declining revenue like advertising and consumer services, but they were offset by other units like food delivery and consumer goods. However, the company is expecting stronger growth to come back later this year, as it's projecting $91 billion in revenue for the next fiscal year.

Stock Price

Alibaba's stock is 15% off its all-time highs, set earlier this year. Over the last two and a half years, it's traded in a sideways range. Over this period, its valuation has improved as its price to earnings ratio has dropped from over 50 to 20.

Going forward, the stock has all the characteristics of big winners in today's market given its above-average revenue growth, the domination of a large and expanding market, and rich margins. However, the stock is also plagued by some uncertainties primarily increasing tensions between the U.S. and China.

Political Risks

Many factors are leading to more scrutiny of China and Chinese companies trading in the U.S. For one, there have been several frauds that have raised questions about accounting practices. Second, the coronavirus and China's handling and transparency have also made it a political target.

President Donald Trump also made China a centerpiece of his campaign, and this has intensified as he seeks to redirect any criticism of his handling of the crisis towards China. Further, recent data is showing that China is not abiding by the parameters set in the trade deal.

These issues have also resulted in a bipartisan push to delist Chinese stocks from U.S. exchanges who do not abide by U.S. securities law. Further, some in Congress are also pushing to bar U.S. investment funds from investing in Chinese companies at all. Many Chinese companies like Baidu (BIDU  ) are reportedly considering delisting from U.S. exchanges, as they believe they could get a better valuation on domestic exchanges.