Alibaba Group Holding Ltd (Nasdaq: BABA) stock jumped nearly 6 percent on Tuesday after a report suggested that Alibaba may be winning its battle against Alphabet Inc (GOOG, GOOGL) for Asian mobile search dominance.
According to the Wall Street Journal report, Alibaba's UC Browser app performs better on the lower-end smartphones that are popular in many Asian markets, and UC Browser is eating into Google Chrome's valuable market share.
U.S. mobile users enjoy all the functionality that the Chrome app offers, but limited memory and unreliable service throughout much of Asia has made the smaller, faster UC Browser from Alibaba the preferred search option for a rapidly-growing market of Asian mobile internet users. While nearly all of the American market is now connected to the internet, only about 30 percent of India's massive 1.3 billion population has internet access. Just one in four of Indonesia's 260 million residents have internet access, according to the most recent data from the International Telecommunication Union.
While most U.S. mobile users have likely never heard of UC Browser, its 430 million global users are more than twice as many as the 178 million users Snapchat parent Snap (SNAP) reported in the most recent quarter.
UC Browser has now captured roughly 51 percent of India's massive mobile search market compared to 30 percent market share for Chrome, according to StatCounter. On a global basis Chrome has a 47 percent share compared to a 16 percent share for UC Browser. In the U.S., UC Browser currently has only about a 1 percent market share.
Alibaba stock had a huge year in 2017 on impressive revenue growth ranging from 44 to 61 percent. Alibaba stock gained 96 percent in 2017, but limped across the finish line after dropping 7 percent in the last six weeks of the year.
Last month, MKM Partners analyst Rob Sanderson said the problems plaguing Alibaba stock in late 2017 were circumstantial and temporary and that MKM analysts continue to view fundamentals for BABA [as] the best among the mega-cap internet stocks.
MKM has a buy rating and $220 price target for BABA stock.