Alibaba Group Holding Limited (NYSE:BABA) Faces Challenges but Shows Growth Potential

Alibaba Group Holding Limited, listed on the New York Stock Exchange under the symbol BABA, is a major player in the global e-commerce and technology sectors. Co-founded by Jack Ma, the company operates various businesses, including online retail, cloud computing, and digital media. Alibaba faces competition from other tech giants like Amazon and Tencent.

On May 16, 2025, Fawne Jiang from Loop Capital Markets set a price target of $176 for Alibaba, while the stock was trading at $123.46. This suggests a potential upside of approximately 42.56%. Despite a slight decrease of 0.36% in its stock price, Alibaba's market capitalization remains robust at around $295.6 billion.

Alibaba's fiscal fourth-quarter results showed a 7% year-on-year revenue growth to $32.58 billion, slightly below the analyst consensus of $33.08 billion. However, the company exceeded expectations with an adjusted earnings per ADS of $1.73, surpassing the anticipated $1.48. Adjusted net income increased by 22% year-on-year to $4.11 billion.

The international commerce retail business reported a strong revenue growth of 24%, reaching $3.80 billion, driven by AliExpress' Choice and Trendyol. The international commerce wholesale business also saw a 16% year-on-year revenue increase to $823 million. Following these results, Alibaba's shares rose modestly by 0.6%, trading at $124.58.

Despite the revenue miss, Alibaba's AI cloud segment is viewed positively, indicating potential for future growth. The stock has traded between $123.31 and $126.10 today, with a trading volume of 17.1 million shares. Over the past year, BABA's stock has ranged from a high of $148.43 to a low of $71.80.

Alibaba (NYSE:BABA) reported strong growth in its cloud business for the fourth quarter, supported by rising demand for artificial intelligence services, while strategic shifts in its logistics arm weighed on overall revenue.

The tech giant’s cloud intelligence division saw revenue climb 18% year-over-year to 30.13 billion yuan ($4.15 billion), slightly ahead of analyst expectations. The growth reflects Alibaba’s ongoing push to invest heavily in AI and cloud infrastructure over the coming years as it strengthens its position in emerging tech.

However, the company’s effort to streamline operations by integrating its logistics platform Cainiao into its broader e-commerce ecosystem led to a 12% drop in Cainiao revenue, which came in at 21.57 billion yuan ($2.97 billion). The restructuring weighed on the group’s total revenue, which rose 7% to 236.45 billion yuan ($32.58 billion), just shy of the 237.91 billion yuan consensus.

The report lands amid broader efforts by Beijing to stimulate the domestic economy, with policies aimed at boosting consumer activity and supporting the struggling real estate sector.

The company’s shares closed more than 7% lower today following the results.

Alibaba Group Holding Limited, listed on the NYSE:BABA, is a major player in the e-commerce and technology sectors. The company is set to release its quarterly earnings on May 15, 2025, with Wall Street analysts estimating an earnings per share (EPS) of $1.48 and projected revenue of approximately $33.3 billion. This release is highly anticipated by investors and analysts alike.

The stock has seen a remarkable rally, increasing by 65.6% over the past year and 54.9% year-to-date, with a notable surge of over 15% in the past month. This impressive performance is largely due to renewed investor optimism surrounding Alibaba's cloud and artificial intelligence strategy. A significant endorsement from Goldman Sachs, which purchased over $1 billion worth of BABA shares, further bolsters confidence in the company's future prospects.

Alibaba's investment in AI infrastructure, amounting to $52.4 billion, is a key focus for investors. The stock is currently trading at $131.65, showing strong bullish momentum as it approaches the earnings announcement. The upcoming earnings call is expected to feature several bullish forward-looking statements from management, with the U.S.-China trade deal and positive outlook on Alibaba's cloud and AI business seen as significant catalysts.

Despite high expectations, there is a belief that the consensus revenue estimate may be underestimated, particularly in the cloud segment. Alibaba Cloud's leading position in the Chinese AI market is expected to have a significant revenue impact. The company's financial metrics, such as a P/E ratio of 19.24 and a price-to-sales ratio of 2.36, reflect the market's valuation of its earnings and revenue.

Alibaba's enterprise value to sales ratio is around 2.43, and its enterprise value to operating cash flow ratio is approximately 15.12, indicating how the market values the company's total value and cash flow. With a debt-to-equity ratio of 0.23 and a current ratio of 1.48, Alibaba demonstrates a relatively low level of debt and a strong ability to cover short-term liabilities. These metrics, along with an earnings yield of 5.20%, provide insight into the company's financial health and potential for growth.

Mizuho raised its price target on Alibaba (NYSE:BABA) from $140 to $170, maintaining an Outperform rating and naming the Chinese tech giant a Top Pick in the Asia Internet sector.

The bullish call follows a deep dive into Alibaba’s artificial intelligence initiatives, with analysts highlighting three key drivers behind the upgrade. First, Mizuho sees robust AI infrastructure positioning Alibaba for long-term success—from building scalable models and API platforms to delivering tailored AI solutions across industries. Second, AI is expected to boost internal efficiency, particularly in areas like product recommendations and conversion optimization, while non-core businesses (ex-Taobao/Tmall Group) are on track to narrow losses and approach breakeven over the next two years.

Third, Mizuho raised its 2026 cloud revenue growth forecast from 13% to 17%, citing increased confidence in Alibaba’s product roadmap and a more optimistic outlook for enterprise IT spending in China.

The new $170 target reflects a 12x multiple on 2026 EBITDA, up from 10x previously, aligning with a broader re-rating across the Chinese tech space and improving macro sentiment.

Mizuho raised its price target on Alibaba (NYSE:BABA) from $140 to $170, maintaining an Outperform rating and naming the Chinese tech giant a Top Pick in the Asia Internet sector.

The bullish call follows a deep dive into Alibaba’s artificial intelligence initiatives, with analysts highlighting three key drivers behind the upgrade. First, Mizuho sees robust AI infrastructure positioning Alibaba for long-term success—from building scalable models and API platforms to delivering tailored AI solutions across industries. Second, AI is expected to boost internal efficiency, particularly in areas like product recommendations and conversion optimization, while non-core businesses (ex-Taobao/Tmall Group) are on track to narrow losses and approach breakeven over the next two years.

Third, Mizuho raised its 2026 cloud revenue growth forecast from 13% to 17%, citing increased confidence in Alibaba’s product roadmap and a more optimistic outlook for enterprise IT spending in China.

The new $170 target reflects a 12x multiple on 2026 EBITDA, up from 10x previously, aligning with a broader re-rating across the Chinese tech space and improving macro sentiment.

Alibaba Group (NYSE:BABA) rallied more than 11% intra-day today after delivering better-than-expected fourth-quarter earnings, fueled by solid revenue growth across its core e-commerce and cloud businesses.

For the quarter, Alibaba posted adjusted earnings per share of RMB21.39 ($2.93), surpassing analyst estimates of RMB19.81. Revenue climbed 8% year-over-year to RMB280.15 billion ($38.38 billion), beating forecasts of RMB277.03 billion.

Its core Taobao and Tmall Group recorded a 9% YoY increase in customer management revenue, reaching RMB100.79 billion ($13.81 billion), driven by higher online gross merchandise volume and improved monetization rates.

The company’s Cloud Intelligence Group continued to gain momentum, with revenue rising 13% YoY to RMB31.74 billion ($4.35 billion). AI-related product revenue sustained triple-digit growth for the sixth consecutive quarter, highlighting Alibaba’s expanding role in China’s AI ecosystem.

Meanwhile, Alibaba International Digital Commerce Group surged 32% YoY to RMB37.76 billion ($5.17 billion), reflecting strong cross-border demand and continued growth in global markets.

Looking ahead, Alibaba projects full-year 2024 revenue growth between 8% and 10%, reinforcing confidence in its ongoing AI-driven transformation and expanding global footprint. With reaccelerating core businesses and robust AI adoption, the company appears well-positioned for sustained momentum in the year ahead.