Given the stock's poor performance since its pandemic-prompted peak in late 2020, it would have been easy to give up on China's e-commerce giant Alibaba Group (BABA -9.88%). And plenty of investors did.

Yet in outright defiance of the Nasdaq Composite's (^IXIC -5.82%) 10% tumble during the first quarter -- its worst quarter since the bear market of early 2022 -- Alibaba shares rallied to the tune of 56% during Q1 this year.

The market's ready for all this good news

Don't look for a single specific reason Alibaba's stock has done so well so far this year. You won't find it. Rather, take a step back and look at the bigger picture. Several different complementary factors are converging here.

One of these factors is the return of Jack Ma. Although the Alibaba co-founder isn't stepping back into a leadership role with the company, early last year he stepped out of the shadows and back into the spotlight to make an impassioned plea to Alibaba's employees to pull the organization out of its funk. And he's remained there ever since, keeping this ticker primed for a bullish response to any good news.

And good news came in January's announcement from Alibaba's artificial intelligence (AI) arm that the latest version of its AI technology platform (called Qwen 2.5-Max) was even better than DeepSeek-V3, which stood the artificial intelligence on its ear just a month earlier. Shortly thereafter, Apple announced it would be integrating Alibaba's AI tech into its iPhones used in China, securing another high-profile win for the company.

Then in late February Alibaba reported solid results for the fiscal quarter ending in December. Top-line growth of 8% (led by the cloud intelligence segment, but also with respectable growth from its e-commerce arm) led the company to revenue and earnings that both topped analysts' expectations. Although the stock's subsequent response was a bit hit-and-miss, shares eventually reached yet another multiyear high in the middle of March.

All told, thanks to investors' new eagerness to embrace good news, as of the end of last month Alibaba shares were 56% above where they ended calendar 2024.

The lull is an opportunity

Things have cooled off a bit in the meantime. In addition to a bit of profit-taking, investors are understandably concerned about the toll that newly imposed tariffs could take on Alibaba's business. And it's a legitimate concern to be sure.

The bullish argument here is still better than the bearish one though, if only because so much of Alibaba's business is done within China, while another sizable chunk of it is at least done within its global region. Recently enacted tariffs could possibly even help.

Underscoring this bullish argument is the fact that the vast majority of analysts still rate Alibaba stock as a strong buy despite all the recent geopolitical drama.