Chinese e-commerce giant Alibaba Group (BABA -0.30%) is on a roll. The company is crushing Wall Street's expectations in the COVID-19 lockdown era, and share prices have soared 64% higher in the last 52 weeks. Is it too late to jump aboard Alibaba's skyrocketing bandwagon or is the stock still a buy?

Recent business trends

Alibaba's sales rose 30% year over year to $21.8 billion in August's first-quarter report. Earnings increased by 15% to $2.10 per share. The results breezed by Wall Street's consensus estimates, which had pointed to earnings near $1.98 per share on approximately $21.3 billion in top-line revenue.

On the earnings call, CEO Daniel Zhang noted that the COVID-19 pandemic accelerated Alibaba's business in many ways. Consumers are doing more shopping online and enterprises rely on cloud computing resources like the Alibaba Cloud platform to an unprecedented degree.

"The pandemic has fundamentally altered our macroeconomic environment and everyday life, but it has also introduced new opportunities," Zhang said. "Digital adoption and transformation is a prevailing trend in this changed landscape, and we are confident that we can create Alibaba's future by capitalizing on the opportunities in this challenging environment just as we did in 2003 during SARS, and in 2008 during the global financial crisis."

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Image source: Getty Images.

Speed bumps in the road ahead

Alibaba is expanding its operations outside Chinese borders, including a deep interest in starting direct e-commerce operations in the United States. Political tension between Washington and Beijing is making that ambition difficult to pursue right now but investors should keep this expansionist agenda in mind for the long haul.

In the meantime, there's a real risk that the Trump administration might take action to obstruct Alibaba's business on American soil. According to a recent report in the Chinese newspaper Global Times, Chinese analysts worry that the U.S. government might block Alibaba's semiconductor development efforts and cloud computing services ahead of the election in November.

Investors should also keep an eye on Alibaba's competitors. Pinduoduo (PDD 0.01%) and (JD 0.10%) are challenging Alibaba's inventory-free business model with their hyper-efficient takes on more traditional online retail models. Alibaba is the largest company in this tight-knit trio but Pinduoduo is growing much faster and Alibaba can't match JD's shipping and logistics infrastructure.

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Image source: Getty Images.

Yes, Alibaba is a buy today

The pandemic has boosted Alibaba's growth trajectory in both e-commerce sales and cloud computing services, and these businesses were winners long before the health crisis came along.

Buying Alibaba shares is a direct bet on the Chinese economy, in the long run, magnified through the lens of booming e-commerce and cloud computing operations. The stock is also fairly affordable, trading at just 30 times trailing earnings and 25 times forward estimates. That adds up to a solid buy. Some investors might prefer Pinduoduo or JD, but Alibaba offers the best balance between risk and long-term rewards, in my opinion.