Alibaba's AI and Cloud Advancements Drive Significant Stock Rally and Market Value Gain

Alibaba shares jump 19% on cloud unit acceleration, report of new AI chip

Signage at the Alibaba Group Holding Ltd. headquarters in Hangzhou, China, on Thursday, Feb. 6, 2025. Alibaba's Hong Kong listed shares surged more than 19% on Monday as the Chinese tech giant's cloud computing unit drove strong quarterly results, while details emerged over its new AI chip development. It's the highest level for the stock since March. Investors have backed the company's improving performance in its key cloud unit and are content with the the tech giant's investment into new areas -- particularly in the so-called "instant commerce," which has become incredibly competitive in China. The Hong Kong rally builds on the momentum of Alibaba's earnings report of Friday, when the company's New York-listed shares closed nearly 13% higher. Alibaba last week week posted revenue for the June quarter of 247.65 billion Chinese yuan ($34.73 billion), marking a 2% year-on-year rise that nevertheless missed analyst expectations. On the upside, a 78% annual surge in net income came in ahead of forecasts. The Chinese company's cloud computing unit was a bright spot with revenue picking up by an annual 26%, which was a faster growth rate than seen in the previous quarter. Alibaba's cloud growth has been accelerating over the last few quarter. Like some of its Chinese and U.S. tech rivals, Alibaba has been investing in AI infrastructure and developing its own models, as well as selling AI services for its cloud computing unit. Investors see the division as key to the company's efforts to monetize artificial intelligence, much like Microsoft or Google. AI-related product revenue "maintained triple-digit year-over-year growth for the eighth consecutive quarter," the company said Friday. That same day, CNBC reported that Alibaba is developing a new AI chip, which also supported the share price rally on Monday. Alibaba's core e-commerce business has meanwhile been showing signs of revival, while the company has jumped into China's cut-throat instant commerce space in China. This is a feature introduced this year on Taobao, one of Alibaba's main Chinese e-commerce apps, which provides deliveries of certain products in China within an hour. Investments in quick commerce weighed on Alibaba's adjusted earnings for its e-commerce business. Investors have given the company some leeway to invest for now.

Alibaba gains $50 billion value after AI progress fuels rally

China's e-commerce leader posted a triple-digit percentage gain in AI-related product revenue as well as a better-than-anticipated 26% jump in sales from the cloud division -- the business most closely tied to the artificial intelligence boom. That helped assuage investors nervous about the fallout from a worsening battle with Meituan and JD.com Inc. in internet commerce. Alibaba's shares gained their most intraday since November 2022 in Hong Kong, boosting the company's market value by more than $50 billion. Turnover in the stock marked a record high as of early afternoon. The rally helped energize the broader AI sphere: Ernie-developer Baidu Inc. gained as much as 5.8%, while Tencent Holdings Ltd. also climbed. "Alibaba's earnings underscore a bifurcation within China tech: AI is delivering scalable growth, while traditional consumer-facing segments remain mired in destructive price competition," said Charu Chanana, chief investment strategist at Saxo Markets. "The triple-digit surge in AI revenue and robust cloud sales show Alibaba is repositioning for longer-term relevance in the tech stack, not just retail dominance," she added. Alibaba's progress in AI -- where it is considered among the front-runners in Chinese artificial intelligence development -- helped gloss over concerns about the three-way battle gripping online commerce. That dealt more damage than anticipated to some of the country's e-commerce leaders: JD's profit halved in the quarter while Meituan warned of major losses, triggering a $27 billion selloff of the three companies' shares last week. The AI element helps explain why Alibaba's stock has easily outpaced its more commerce-reliant rivals this year. Alibaba has also leveraged the growth of an international arm that encompasses some of the world's most-recognized online shopping platforms from Lazada to AliExpress. It has "China's best AI enabler thesis," Morgan Stanley analysts including Gary Yu wrote in a research note. That's as losses from meal delivery and instant commerce peak this quarter, they said. Investors are now focused on whether Alibaba will pursue that margin-eroding competition, at a time it's declared record amounts of spending toward developing AI services and computing. On Friday, commerce chief Jiang Fan argued that investments in quick commerce -- food delivery and instant shopping -- had already driven 20% growth in users on its main Taobao marketplace. The fledgling division has in four months grown to the point that it can begin to achieve economies of scale, he added. Alibaba is simultaneously making substantial investments in the AI field, developing large language models to avoid falling behind in a critical technological race. The company views AI as essential to its future, whether in terms of providing cloud computing, powering its core business or coming up with services to challenge OpenAI and DeepSeek. CEO Eddie Wu went as far as saying in February that artificial general intelligence, or AGI, is now the company's primary objective. Just last week, Alibaba updated its own open-source video generating model, part of a string of recent upgrades that span the gamut from agentic AI services to chatbots. It remains to be seen if Alibaba can turn AI into a money-spinner in an increasingly competitive field. From Baidu to Tencent, Chinese firms are enhancing and releasing AI models at a frenetic pace, increasing the pressure on Alibaba to deliver breakthroughs. "Alibaba's breakout reinforces a broader theme in Asia: while global tech remains preoccupied with geopolitics and valuations, parts of China tech are quietly reaccelerating -- driven not by hype, but by real revenue growth in AI and cloud," Chanana said. "This isn't a broad-based rotation yet -- but the divergence is real." "Alibaba's breakout reinforces a broader theme in Asia: while global tech remains preoccupied with geopolitics and valuations, parts of China tech are quietly reaccelerating -- driven not by hype, but by real revenue growth in AI and cloud," Chanana said. "This isn't a broad-based rotation yet -- but the divergence is real."

What's Going On With Alibaba Stock Thursday? - Alibaba Gr Hldgs (NYSE:BABA)

Alibaba Group Holding Ltd. BABA shares are in focus ahead of the company's quarterly results, as investors weigh its AI ambitions, cloud growth, and lingering concerns over China's market risks. The stock has gained over 44% year-to-date due to strong earnings and revenue growth, AI-driven cloud expansion, global e-commerce growth, and a discounted valuation. At the same time, Alibaba has accelerated its artificial intelligence push, updating its open-source video-generating model to better compete with both domestic and U.S. rivals. Also Read: Alibaba Unites Its Empire To Fight Back Against Meituan Bloomberg reported this week that Alibaba's new Wan2.2-S2V model can transform portrait photos into "film-quality avatars" capable of speaking, singing, and performing. The move underscores the company's efforts to double down on AI following the rapid global rise of DeepSeek. However, competition is intensifying, with Alphabet Inc.'s GOOGL GOOGL Google, Manus, and Kuaishou all releasing rival video-generation tools. Despite its gains this year, Alibaba's stock has slipped since Wednesday alongside other U.S.-listed Chinese equities, as investors remain wary of a repeat of China's 2015 stock bubble, when speculative rallies and rising leverage outpaced weak economic fundamentals. Analysts say the upcoming earnings report, due Friday, will be critical in showing how Alibaba intends to monetize its AI rollout amid slowing growth and stiff e-commerce competition. According to LSEG data, cloud revenue is projected to have risen 4.3% sequentially to 31.4 billion yuan ($4.4 billion) in the second quarter, up 18% year-over-year but showing signs of deceleration. The company also cut prices for its Qwen-Long API by as much as 97%, highlighting the pressure of China's escalating AI price war as tech firms pivot toward enterprise clients in a sluggish consumer environment. Adding to investor caution, Bridgewater Associates recently exited its holdings in Alibaba and other U.S.-listed Chinese firms, a move viewed as a strategic shift under CEO Nir Bar Dea and a reflection of heightened regulatory and geopolitical risks tied to China. Price Action: BABA stock is trading lower by 3.05% to $118.55 at last check Thursday. Read Next: DeepSeek's New AI Model Sparks Rally In Chinese Tech And EV Stocks As Nvidia Retreats Image via Shutterstock BABAAlibaba Group Holding Ltd$120.90-1.09%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum78.04Growth97.36Quality38.48Value84.27Price TrendShortMediumLongOverviewGOOGLAlphabet Inc$210.821.61%Market News and Data brought to you by Benzinga APIs

Alibaba Q1 Earnings Preview: Chinese Giant Turns To AI, Cloud Growth After E-Commerce Dominance - Alibaba Gr Hldgs (NYSE:BABA)

Chinese e-commerce giant Alibaba Group Holding BABA may reveal how global issues are impacting the company and how diversification into AI might help future growth when the company reports its first-quarter financial results on Friday before the market opens. Earnings Estimates: Analysts expect Alibaba to report first-quarter revenue of $34.26 billion, down from $33.47 billion in last year's first quarter, according to data from Benzinga Pro. The company missed analyst estimates for revenue in the fourth quarter, but has beaten estimates in seven of the last 10 quarters overall. Analysts expect the company to report first-quarter earnings per share of $1.95, down from $2.26 in last year's first quarter. The company has beaten analyst estimates for earnings in two straight quarters and seven of the previous 10 quarters overall. Read Also: Chinese Stocks Sink As Bubble Fears Revive Memories Of 2015 Crash Key Items to Watch: Several analysts have lowered their price targets on Alibaba stock ahead of the earnings release, including Barclays and Bank of America Securities. The stock, and other Chinese stocks, have also found their way being sold or stakes lowered in investment portfolios of top hedge funds in recent months, including Bridgewater, Appaloosa and Coatue Management. Once known best for its e-commerce in China, investors and analysts may be excited to hear more about Alibaba's growth in the cloud and AI sectors, two of the fastest-growing areas. A report stated that Alibaba and Baidu were the leaders in China's public cloud services for artificial intelligence in 2024, each representing around a 25% market share. The company's AI coding model, Qwen 3 coder, has been gaining global traction. In the fourth quarter, Alibaba's Cloud Intelligence Group was a key performer with revenue up 18% year-over-year. The growth of the segment outperformed that of many of the company's other segments. The company stated that the increased adoption of AI-related products contributed to the segment's growth. Another area to watch is Alibaba's growth outside of China, with the company's International Digital Commerce Group posting a year-over-year increase of 22% in the fourth quarter, driven by its cross-border businesses. With the United States making imports from China more difficult and imposing tariffs on goods from many countries, Alibaba's report could reveal the significant impact the Trump administration is having on its business in the U.S. and how diversification in China and other regions can mitigate any challenges. BABA Price Action: Alibaba stock is down 1.4% to $120.45 on Thursday, versus a 52-week trading range of $80.06 to $148.43. Alibaba stock is up 41.8% year-to-date in 2025. Read Next: 44 Public Companies Make Time's Most Influential List: Coinbase, UFC, Nintendo, Netflix And More Stocks Investors Can Buy Photo: Shutterstock BABAAlibaba Group Holding Ltd$120.80-1.17%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum78.04Growth97.36Quality38.48Value84.27Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Why Is Alibaba Stock Soaring Friday? - Alibaba Gr Hldgs (NYSE:BABA)

Alibaba Group Holding BABA shares climbed on Friday following the release of its fiscal first-quarter results, as the e-commerce giant co-founded by Jack Ma reported revenue that exceeded analyst expectations. The company posted quarterly revenue of $34.57 billion, up 2% year-over-year, surpassing the consensus estimate of $34.26 billion. On a like-for-like basis, excluding revenue from the divested Sun Art and Intime businesses, Alibaba's revenue would have grown 10% year-over-year. Also Read: Alibaba Stock Slides Ahead of Earnings as AI Push, Cloud Growth, and China Risks Take Center Stage Despite the top-line beat, adjusted earnings per American Depositary Share (ADS) came in at $2.06, falling short of the analyst consensus of $2.13. Adjusted net income declined 18% to $4.68 billion, while adjusted EBITA slipped 14% year-over-year to $5.42 billion, reflecting investments in Taobao Instant Commerce and enhancements to user experiences, acquisitions, and technology. Net income, however, surged 76% year-over-year, driven primarily by mark-to-market gains from equity investments and the disposal of Trendyol's local consumer services business. Alibaba's China E-commerce Group drove core growth, with revenue rising 10% to $19.55 billion. The company invested heavily in quick commerce initiatives, including the launch of Taobao Instant Commerce, which expanded on-demand delivery and spurred a 25% increase in monthly active users. Strong results from the 6.18 Shopping Festival, higher take rates, and double-digit growth in 88VIP memberships also contributed to the segment's performance. International operations fared well, with the Alibaba International Digital Commerce Group reporting a 19% increase in revenue to $4.85 billion. Growth was fueled by cross-border expansion, narrowed losses, and improved unit economics at AliExpress and Trendyol through logistics optimization and investment efficiency. The Cloud Intelligence Group posted a 26% revenue increase to $4.66 billion, driven by rising demand for AI products, public cloud services, and generative AI infrastructure. AI-related product revenue continued its streak of triple-digit growth for the eighth consecutive quarter. Alibaba's cash position remained robust, with $81.76 billion in cash and equivalents as of June 30, 2025. The company generated an operating cash flow of $2.89 billion, down 39%, and free cash flow was an outflow of $2.63 billion, primarily reflecting cloud infrastructure spending and investments in Taobao Instant Commerce. Headcount slightly declined to 123,711 employees, from 124,320 at the end of March 2025. Alibaba CEO Eddie Wu said the company drove strong growth by focusing on consumption and AI + Cloud, hitting milestones in quick commerce and boosting engagement across its platforms. He noted that soaring AI demand accelerated Cloud Intelligence Group revenue and made AI products a significant share of revenue from external customers. "Looking ahead, we remain committed to investing in our two strategic pillars of consumption and AI + Cloud to capture historic opportunities and drive long-term growth," Wu added. CFO Toby Xu said Alibaba's core strength supports continued investment in AI and quick commerce while improving efficiency, pointing out that AIDC nearly reached breakeven this quarter. Alibaba developed a new AI inference chip to strengthen China's self-sufficiency push and reduce reliance on Nvidia NVDA, the Wall Street Journal reported on Friday. Unlike its previous processors built for narrow applications, the chip, now in testing, is designed to handle a broader range of AI inference tasks. It is compatible with Nvidia's platform, making it easier for engineers to repurpose existing software. The chip, manufactured in China rather than by Taiwan Semiconductor Manufacturing TSM, reflects Alibaba's $53 billion investment plan in AI and cloud services over the next three years. Price Action: BABA shares are trading higher by 4.21% to $124.60 premarket at last check Friday. Read Next: Nutanix Poised To Capture Market Share With Expanding Cloud Platform And VMware Disruption: Analyst Image via Shutterstock BABAAlibaba Group Holding Ltd$124.203.87%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum76.29Growth97.36Quality38.03Value84.98Price TrendShortMediumLongOverviewNVDANVIDIA Corp$178.00-1.20%TSMTaiwan Semiconductor Manufacturing Co Ltd$235.00-1.37%Market News and Data brought to you by Benzinga APIs

Alibaba Cloud Emerges As 'China's Leading GenAI' Provider, Analyst Says - Alibaba Gr Hldgs (NYSE:BABA)

As global tech giants increasingly pivot to digital ecosystems, industry leaders like Alibaba Group Holding Ltd BABA are capitalizing on the shift by enhancing their cloud services and expanding e-commerce capabilities. This strategic focus is particularly crucial as companies navigate evolving consumer behaviors and competitive pressures in the tech landscape. Alibaba's fundamentals are strengthening across the cloud and e-commerce segments, according to Benchmark. The Alibaba Group Holding Analyst: Analyst Fawne Jiang reiterated a Buy rating, while raising the price target to $195. BABA is gathering positive momentum. See if it is worth your attention here. The Alibaba Group Holding Thesis: While the company missed the fiscal first-quarter headline consensus, this was mainly due to certain asset divestitures and margin pressure from a spike in Quick Commerce investment, Jiang said in the note. Check out other analyst stock ratings. Alibaba's Cloud segment delivered 26% year-on-year growth, beating expectations, and the company guided to further acceleration, which reinforces "its position as China's leading GenAI and cloud infrastructure provider," he commented. While Quick Commerce pressurized margins, "we view it as having strategic potential to be accretive, expanding long term GMV TAM, driving user traffic, and supporting long-term ad revenue upside," the analyst wrote. Alibaba appears poised for market share gains and multiple expansion, he further stated. BABA Price Action: Alibaba Gr Hldgs shares were up 1.48% at $137.00 at the time of publication on Tuesday. The stock is trading within its 52-week range of $80.06 to $148.43, according to Benzinga Pro data. Read More: Alibaba's New AI Chip Sparks Nvidia Dip, But Ross Gerber Calls It 'Laughable' Posturing To Still Secure Blackwell Sales Photo: Mamun_Sheikh/Shutterstock BABAAlibaba Group Holding Ltd$136.441.07%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum72.29Growth97.41Quality36.08Value84.93Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Alibaba Stock Surged Nearly 19% Higher In Hong Kong On Monday: What's Going On - Alibaba Gr Hldgs (NYSE:BABA), NVIDIA (NASDAQ:NVDA)

Alibaba Group Holding Ltd BABA saw its Hong Kong-listed shares surge by 18.5% on Monday amid strong quarterly performance of the company's cloud computing unit and the unveiling of a new AI chip. Cloud Growth Pushes Alibaba Shares To March peak The stock's surge on Monday marked its highest level since March. The company's cloud computing unit was the driving force behind the impressive quarterly results, with investors showing confidence in Alibaba's expansion into new areas, particularly "instant commerce," a fiercely competitive sector in China. Check out the current price of BABA stock here. Despite a 2% year-on-year increase in revenue for the June quarter, which fell short of analyst expectations, the company's net income surged by 78% annually, surpassing forecasts. The cloud computing unit's revenue also grew by 26% annually, a faster rate than the previous quarter, indicating a continuous acceleration in Alibaba's cloud growth. This rally in Hong Kong follows the momentum of Alibaba's recent earnings report, which saw its New York-listed shares close nearly 13% higher on Friday. SEE ALSO: Warren Buffett's Strategy: It's A Terrible Mistake To Think of Stocks As Something That Bob Up And Down, And You Should Pay Attention To Those' Alibaba's AI Chip Fuels Optimism Despite Nvidia Doubts The surge in Alibaba's shares also comes after the company unveiled a new AI chip designed to reduce China's reliance on Nvidia Corp NVDA, a significant U.S. semiconductor company. This move was seen as a direct challenge to U.S. restrictions and highlighted China's determination to counter these restrictions with homegrown technology. Despite the initial impact of Alibaba's new AI chip on Nvidia's stock, some industry experts like prominent investor Ross Gerber dismissed the move as "laughable," suggesting that it was merely a strategic posturing to maintain sales. Alibaba's recent surge in shares indicates that investors are optimistic about the company's future, particularly its cloud computing unit and its foray into new technologies like AI chips. According to Benzinga Edge Stock Rankings, Alibaba has a growth score of 97.36% and a momentum rating of 76.29%. Click here to see how it compares to other leading tech companies. READ MORE: Nvidia Leans Heavily on Two Undisclosed Customers for Revenue Boom Image via Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. BABAAlibaba Group Holding Ltd$135.0012.9%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum76.29Growth97.36Quality38.03Value84.98Price TrendShortMediumLongOverviewNVDANVIDIA Corp$173.67-3.61%Market News and Data brought to you by Benzinga APIs

What Happened to Alibaba (BABA) This Year?

Enjoy 0% intro APR on purchases and balance transfers for 15 months -- plus up to 5% cash back in popular categories. Alibaba (BABA 0.02%), the largest e-commerce and cloud infrastructure company in China, has shed about 60% of its value since it closed at a record high of $307.84 on Oct. 27, 2020. The bulls retreated as the company faced fierce regulatory, competitive, and macroeconomic headwinds. China's antitrust regulators slammed its e-commerce business with a record fine and shackled it with tighter restrictions in 2021. Those setbacks eroded its defenses against aggressive competitors like PDD and JD.com. As for the macro environment, the sluggish growth of China's economy after the pandemic curbed consumer spending and drove many companies to rein in their spending on the company's cloud-based services. Those challenges convinced many investors that Alibaba's high-growth days were over. However, since the beginning of 2025, its stock has rallied nearly 50%. Below, I'll review the main catalysts that fueled that rally and see if they'll drive the company's shares even higher through the end of the year. Alibaba impressed the market again with the stabilization of its e-commerce business, the accelerating growth of its cloud business, and its bold buybacks. The company has been offsetting the slower growth of its maturing Taobao and Tmall marketplaces in China with the robust growth of its overseas marketplaces. In fiscal 2025 (which ended in March), its Taobao and Tmall revenue rose just 3%. But its smaller International Digital Commerce Group (which includes Lazada in Southeast Asia, Trendyol in Turkey, Daraz in South Asia, and AliExpress for its cross-border purchases) saw revenue jump 29%. Meanwhile, Alibaba's Cloud Intelligence revenue rose 11% as the explosive growth of the artificial intelligence (AI) market drove more companies to ramp up their spending on its cloud infrastructure services again. It also integrated Qwen -- its own family of large language models (LLMs) for new generative AI applications -- into its cloud infrastructure platform to attract more AI-oriented customers. The expansion of that ecosystem turned Alibaba from an aging e-commerce leader into an exciting cloud and AI play. Alibaba's revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) both rose 6% in fiscal 2025. With an enterprise value of 1.69 trillion yuan ($240 billion), the company's stock looks dirt cheap at 2x this year's sales and 8x its adjusted EBITDA. That valuation is likely being compressed by the unresolved trade issues between the U.S. and China, which are curbing the market's appetite for Chinese equities. Yet the company bought back 5% of its shares for $11.9 billion in fiscal 2025 -- which implies it's still deeply undervalued. Therefore, a favorable trade deal between the U.S. and China could drive its valuations a lot higher. From fiscal 2025 to fiscal 2028, analysts expect Alibaba's revenue and adjusted EBITDA to grow at a compound annual growth rate (CAGR) of 7% and 11%, respectively. That growth should be driven by the growth of its e-commerce and cloud businesses, the expansion of its generative AI ecosystem, and the increased usage of its logistics services for third-party customers. Alibaba also recently proposed a spin-off of its Banma autonomous driving unit, which suggests it might revisit plans to spin off its cloud and logistics units in fresh initial public offerings (IPOs). A chilly market and other macro challenges forced it to scrap those plans, but spinning them off could boost the company's cash flow while unlocking more value for its shareholders. Alibaba's high-growth days are probably over. The company should grow at a stable rate over the next few years as its core businesses expand and it finds fresh ways to boost its earnings, but it will likely be considered a value play instead of a growth one. Its stock could gradually head higher through the end of the year if the relationship between the U.S. and China warms up, but investors shouldn't expect it to revisit its all-time highs anytime soon.

Why Alibaba Rallied Today | The Motley Fool

Alibaba reported earnings today, which appeared to encourage investors. While profits actually went down, an acceleration of cloud and artificial intelligence (AI) revenue appear to be the most important data points. In addition, the Wall Street Journal reported the Chinese tech giant has developed a new AI chip, which could take on importance since China recently issued an order discouraging the use of Nvidia's (NVDA -3.38%) H20. In its fiscal first quarter, Alibaba grew revenue just 2%, but revenue grew 10% outside of divestitures, which included the Sun Art and Intime businesses. Within that 10%, Alibaba's domestic e-commerce revenue grew 10%, international e-commerce grew 19%, and the cloud intelligence group accelerated to a 26% growth rate. On the negative side, profits actually decreased, with adjusted non-GAAP (generally accepted accounting principles) earnings before interest, taxes, depreciation, and amortization (EBITDA) falling 11%. The company put big investments behind its Taobao Instant Commerce initiative, which aims to deliver packages within an hour, as well as associated marketing efforts. An overwhelming majority of Alibaba's business is still in a brutally competitive Chinese e-commerce industry, and at least in this quarter, we saw that competition in the form of lower margins. Yet it appears the cloud revenue acceleration was exciting enough, especially as management noted that AI-related cloud revenue grew at a triple-digit rate for the eighth consecutive quarter. AI enthusiasm may have also been sparked by today's Wall Street Journal article highlighting Alibaba's new chipmaking efforts. Alibaba's prior efforts in this area had focused on application-specific chips, but the WSJ reported Alibaba's newest chip can achieve a broader range of AI inference tasks. Also embedded in the WSJ article is the fact that. unlike Huawei's AI chip, Alibaba's new chip will be software-compatible with Nvidia's, so developers won't have to reprogram their entire stack. Alibaba has rebounded strongly off its lows of late 2022, more than doubling since then, but also sits about 63% below its all-time highs from late 2020. The stock trades for just 18 times earnings, which still seems cheap for a tech giant with an AI growth story. Of course, most Chinese tech giants trade cheaper than their U.S. peers for geopolitical reasons, and Alibaba also has strong competition on the e-commerce side. Nevertheless, for those seeking some China-specific exposure, Alibaba should be on the list, if not near the top.

Prediction: Alibaba Will Double Over the Next 3 Years. Here's 1 Reason Why. | The Motley Fool

Investing in companies that are building global cloud and AI infrastructure can prove to be a wise strategy in the long run. The year 2025 has been challenging for many Chinese technology stocks. China's economy has been slowing down. In the second quarter of 2025, China's gross domestic product (GDP) grew by 5.2% year over year, down from 5.4% in the first quarter. Retail sales and property investment also softened in the second quarter, leaving many investors cautious. That backdrop seems to be weighing heavily on valuations of many Chinese stocks. Despite this, some China-based companies still offer significant upside potential. Alibaba Group Holding (BABA -1.52%) is one such company. Although it missed consensus revenue and earnings estimates in the recent quarter (the first quarter of its fiscal 2026, which ended June 30, 2025), the company warrants closer examination. I predict it will double over the next three years. And there's one thing in particular fueling my optimism. Rapid momentum in Alibaba's cloud and artificial intelligence (AI) business is the key factor that can drive its share price growth. Alibaba's Cloud Intelligence Group revenue rose 26% year over year to nearly $4.7 billion in the most recent quarter, with AI-related sales growing year over year at triple-digit rates. AI has maintained this solid pace of growth for eight consecutive quarters, driven by the accelerated development of AI applications and the rapid adoption of AI by enterprise clients. AI applications are also driving demand for the company's traditional products, such as compute and storage. To support this growth, Alibaba plans to invest 380 billion renminbi (about $52.5 billion ) over the next three years in cloud and AI infrastructure. The company invested RMB 38.6 billion in AI and cloud infrastructure in the recent quarter and more than RMB 100 billion in the past four quarters, primarily for expanding AI capacity and product development. The Chinese data center market is expected to grow from $16.4 billion in 2024 to $32.2 billion in 2030. In the first quarter of 2025, Alibaba accounted for an estimated 33% of cloud infrastructure services spending in China, while Huawei and Tencent accounted for 18% and 10%, respectively. With demand for AI training and inference rising across industries and Alibaba's focus on rapidly scaling cloud and AI capacity, the company seems well positioned for long-term growth. Alibaba has already entered into a strategic partnership with SAP to provide cloud and AI services support to the latter's enterprise clients. Alibaba is also advancing the capabilities of its Qwen3 AI foundational models and has introduced AI-native applications, such as Amap 2025, a location-based application, and DingTalk's new workplace agent. Hence, Alibaba is not only building AI infrastructure but also AI applications to create a sticky customer base. Alibaba is also focusing on diversifying its revenue base beyond China. The company has announced new data centers in Malaysia and the Philippines, and it recently launched a global AI innovation hub in Singapore to support more than 5,000 businesses and 100,000 developers. Although AI and cloud are the key catalysts, Alibaba's traditional e-commerce business continues to deliver strong growth. China e-commerce revenue grew 10% year-over-year to RMB 140.1 billion in the first quarter. The company is also doubling down on the Chinese quick commerce market -- delivery in under an hour -- which is estimated to grow from $92.7 billion in 2025 to $135.5 billion by 2030. The quick commerce business on its Taobao app had almost 300 million monthly active users in August 2025, with peak daily orders hitting 120 million. The high level of user engagement is driving higher advertising and transaction fees, which in turn strengthen Alibaba's financial base. Certain risks, however, cannot be ignored. With China's economy slowing and consumers under pressure, the company's e-commerce business may face stagnation. Competition in quick commerce from players like Meituan and Kuaishou remains fierce. Additionally, quick commerce also requires higher capital expenditure for expanding the rider base and warehouses. Increasing uncertainties in global chip supply could also prove a challenge to Alibaba's plans to expand data center capacity. However, Alibaba has developed its own inference chip to reduce its reliance on U.S. chip players. Investors should expect short-term volatility, as management may temporarily prioritize growth over margins. Alibaba's valuation also leaves plenty of room for upside. The stock is trading 56% below its all-time high of $307.80 in October 2020, due to increasing regulatory pressures and concerns about slowing growth. The company is currently trading at 14 times forward earnings estimates, which is far lower than its historic five-year average of 26.6. On the other hand, e-commerce peers such as Amazon and MercadoLibre trade at a forward price-to-earnings ratios of 34.6 and 46.5, respectively. So investors are willing to pay more for them. Analysts expect Alibaba's earnings per share (EPS) to be around $7.78 in fiscal 2026 (ending March 31, 2026), $10.20 in fiscal 2027, and $11.99 in fiscal 2028. Even if the company's forward P/E multiple improves to 25 (in line with its historic average multiple, still a discount to U.S. peers), the stock would trade close to $300 -- more than double its current share price of $135 (as of Aug. 31, 2025). I think it is apparent that even without unrealistic assumptions, Alibaba's stock can double by 2028.

Alibaba Shares Rise on AI Strength. Can the Stock's Momentum Continue? | The Motley Fool

Let's take a closer look at Alibaba's most recent earnings and future prospects to see if the stock can continue its momentum. Alibaba's cloud computing business grabbed headlines, as revenue growth accelerated to 26% in the quarter to come in at nearly $4.7 billion. The growth was driven by artificial intelligence (AI), with AI product revenue more than doubling for the eighth straight quarter. The segment's adjusted EBITA (earnings before interest, taxes, and amortization), meanwhile, also climbed 26% to $412 million. The company highlighted a new partnership with SAP, where SAP customers will be able to run their systems on Alibaba's infrastructure. It is also currently developing a new AI chip specifically designed for inference. Alibaba plans to invest a whopping $53 billion in AI over the next three years. While its AI efforts were in focus, the company's e-commerce business remains its largest business. This is in contrast to its American counterpart, Amazon, whose Amazon Web Services (AWS) has become its largest business by profitability. Alibaba's two main e-commerce platforms are Tmall, which is similar to Amazon's marketplace business, and Taobao, which is like eBay without the auction format. Alibaba's e-commerce business has been under pressure for the past few years due to increasing competition and a weak Chinese consumer. However, the company invested aggressively to help grow its gross merchandise value (GMV), and then added a new software service fee and AI marketing tool, Quanzhantui, to drive revenue and profit growth. This paid off in the quarter, with its e-commerce segment growing its revenue 10% year over year to $19.6 billion. Its third-party business revenue also rose 10%, while its quick-commerce revenue climbed 13%. However, its investment in quick commerce weighed on profitability, with segment EBITA sinking 21% to $5.4 billion. Its 88VIP premium memberships once again increased by double digits, topping 53 million members. Alibaba is making a big investment in quick commerce, or "instant commerce," where buyers can get an item from its Taobao platform delivered in an hour or less. Monthly active users for the segment have already reached 300 million, up 200% since April. It said the introduction of the service drove a 20% increase in Tabao daily users and led to a big increase in average purchase per user. It's now also transitioning its Tmall Supermarket business to a quick commerce model. The company's international commerce segment (AIDC), which includes AliExpress, also had a strong quarter. Revenue jumped 19% to $4.9 billion. Importantly, its segment EBITA came in at negative $8 million, which is a huge improvement over the much larger losses it had been experiencing in past quarters. Overall, Alibaba's revenue increased 2% to $34.6 billion, but was up 10% after excluding dispositions. Adjusted EBITA fell 14% to $5.4 billion, while its adjusted earnings per American depositary share (ADS) dropped 10% to $2.06. Its operating cash flow fell 39% to $2.9 billion, while its free cash flow was an outflow of $2.6 billion as it invested heavily in data center infrastructure. Alibaba ended the quarter with $52.3 billion in cash and short-term investments and $32.3 billion in debt. It also had $51 billion in equity and other investments on its balance sheet. While its overall numbers were nothing to write home about, Alibaba's strong e-commerce and cloud computing revenue momentum got investors excited. The company is clearly becoming one of the leaders in Chinese AI, and the introduction of a new AI chip for inference could help cement its status even further. While its e-commerce business is starting to regain traction, the company is also investing heavily back into the business to capture a growing quick-commerce opportunity. While this will weigh on profitability, if it can drive long-term growth and give the company an edge in the competitive Chinese e-commerce landscape, it will be the right move. Meanwhile, its AIDC business made big strides toward profitability in the quarter, which should bode well for future profitability growth. Turning to valuation, the stock trades at a forward price-to-earnings (P/E) ratio of about 13 times fiscal 2026 analyst estimates. That's still pretty inexpensive despite the stock's strong performance this year. Given Alibaba's growing AI momentum, e-commerce turnaround, quick commerce investments, and AIDC profitability improvements, I think the stock still looks like a solid buy at its current valuation.

Alibaba rallies as cloud growth offsets China price war pressures (BABA:NYSE)

New! Get unlimited breaking news with a free Seeking Alpha account " Alibaba (NYSE:BABA) broke higher in early trading despite posting second quarter results below the expectations of analysts. Revenue was up 2% year-over-year to RMB247,652 million ($34.6 billion), which was below the consensus expectation. Excluding revenue from the disposed businesses of Sun Art and Intime, revenue on a like-for-like basis would have grown by 10% year-over-year. Customer management revenue grew 10% and revenue from Cloud Intelligence Group grew 26%, with AI-related product revenue achieving triple-digit growth for the eighth consecutive quarter. Local e-commerce growth was weak during the quarter amid intense competition and deflationary pressures in China, with rivals like PDD (PDD) and JD.com (JD) aggressively cutting prices again. Operating income dropped 3%, and non-GAAP net income declined by 18% year-over-year, weighed down by investments in new rapid commerce and AI initiatives. "Our decisive investment in the quick commerce business achieved key milestones as we won consumer mindshare. We generated substantial synergies from combining resources of our consumer platforms which resulted in new highs in monthly active consumers and daily order volume," stated CEO Eddie Wu. "Driven by robust AI demand, Cloud Intelligence Group experienced accelerated revenue growth, and AI-related product revenue is now a significant portion of revenue from external customers," he added. On Seeking Alpha, Danil Sereda, Investing Group Leader for Beyond the Wall Investing, said that once Alibaba's (NYSE:BABA) one-offs that negatively impacted sales/earnings in the past quarters are gone, the company's growth should accelerate. Sereda remained bullish on the e-commerce stock. Shares of Alibaba (BABA) were up 3.7% in premarket trading on Friday. More on Alibaba Today's chaos. Tomorrow's opportunity Seeking Alpha helps you make sense of the headlines. New! Get unlimited breaking stock news for free -- so you can stay on track for a stronger financial future.

Alibaba Shares Jump on Strong Cloud, E-Commerce Growth

Alibaba Group's shares surged in Hong Kong on optimism about its cloud business amid strong AI demand and improvements in its e-commerce. Shares rose as much as 19% to 137.50 Hong Kong dollars, equivalent to US$17.64, early Monday, putting it on track for their biggest one-day gain in more than three years. The stock was the top gainer on the benchmark Hang Seng Index, which was recently up 2.2%. The rally followed a 13% jump in its ADRs on Friday after earnings. Alibaba posted a 78% rise in net profit for the three months ended June from a year earlier. Alibaba said cloud revenue grew 26% in the April-June quarter on surging demand for AI services. Chief Executive Eddie Wu has called "AI plus cloud" one of Alibaba's two growth engines, alongside e-commerce. The results prompted several analysts to raise target prices, citing accelerating cloud revenue driven by AI monetization and improvements in its quick commerce. Alibaba's rapid-delivery feature on its shopping platform is its latest bid to take share in China's on-demand delivery market from rivals such as JD.com and Meituan; so-called quick commerce typically delivers in under an hour. The pace of profitability improvement in quick commerce appears faster than expected, Daiwa Capital Markets analysts John Choi and Robin Leung wrote, adding that cloud revenue growth should accelerate in coming quarters as AI workloads rise. They lifted their target price to HK$180 from HK$170. Alibaba has achieved its "first-stage goal for quick commerce, which is to scale up user growth and build consumer mind share," Jefferies analysts said. This brings "much-needed growth," but will cause temporary margin pressure, Nomura analysts Jialong Shi and Rachel Guo said. "In the long run, we think Alibaba's strength lies in the retail-related quick commerce service," they said. Nomura raised its target price for Alibaba's ADRs to US$170 from US$152 on a stronger outlook for the e-commerce and cloud. Quick commerce losses will likely peak in the September quarter, while growing AI demand continues to drive cloud momentum, they added.

Alibaba is up 18%: thank you, AI!

The cloud division, up 26%, significantly exceeded forecasts (18.4%) to reach 33.4 billion yuan ($4.67 billion). This is a strong signal, welcomed by analysts, who see it as a sustainable growth driver for the group. The Chinese group is now clearly focusing on AI as a strategic lever. "Our investments in AI are starting to bear fruit," said CEO Eddie Wu, adding that more than 100 billion yuan has been invested in AI and infrastructure over the past 12 months. According to DZ Bank, AI-related revenues have grown by triple digits for the eighth consecutive quarter. Alibaba is stepping up its technological announcements and even developing its own chips, according to the Wall Street Journal, against a backdrop of Sino-American tensions over advanced components. The goal is to reduce its dependence on Nvidia and secure the deployment of its data centers in China. But the cloud's performance does not completely mask the weaknesses of the rest of the group. Overall revenue reached 247.7 billion yuan, below expectations (253.2 billion). Adjusted EBITA fell 14% and free cash flow turned negative, at -18.8 billion yuan, weighed down by heavy investments in infrastructure and express delivery. Not yet, but the market seems willing to believe so. The rise in the stock price reflects renewed confidence, supported by the rise of the cloud and Alibaba's AI strategy. However, the group is at a turning point. Its core business, e-commerce in China, remains under pressure: revenues are up 10%, but EBITA is down 21%. Quick commerce, which enables deliveries within an hour, is weighing on profitability. Nevertheless, Alibaba sees it as a vehicle for expansion, with an ambitious target of an additional 1 trillion yuan in GMV per year within three years. Internationally, the recovery of AliExpress and growth in Europe and the Middle East confirm a certain dynamism, but margins remain low. The group still needs to convince investors that it can transform its massive investments into sustainable growth drivers without sacrificing profitability. But it is clear that it is the AI narrative that has been boosting the stock since this weekend.