Why DCF Model cannot Fairly Value Technology Giants Like Alibaba

Abstract

The DCF and WACC model is one of the most commonly used models to value a company. However, technology giants such as Alibaba do not generate cash flows that match their valuation. This paper takes a deep dive into the valuation of Alibaba as an example to value giant technology companies. The research in this paper shows that DCF and WACC model is unable to value technology giants like Alibaba fairly.