Alibaba Earnings on Deck With Stock Back In Favour (NYSE: BABA)

Alibaba's stock (NYSE: BABA) has staged a remarkable comeback in 2025, with the price surging 57.8% year-to-date leading into this morning's earnings. This resurgence, coming after a multi-year regulatory crackdown and fierce competitive pressures, reflects renewed investor optimism around Alibaba’s aggressive pivot to artificial intelligence (AI), cloud computing, and international expansion.

As the company prepares to announce its Q4 fiscal 2025 earnings, markets are closely watching for confirmation that these strategic initiatives are translating into sustained revenue and profit growth.

Analysts forecast Q4 EPS of CNY12.94 and revenue of CNY237.244 billion, up 6.9% year-over-year. For the long term, revenue is projected to top $1.074 trillion in 2026, with an EPS estimate of $80.83 for 2027. Recent buyback activity of $4.8 billion in Q3, has reduced shares outstanding by 3.1%, adding further support to the share price.

Outside of U.S trading hours, we look to Alibaba's Hong Kong listing (9988.HK) for the latest move, which has the stock down 1.61% moving into the close. With earnings coming before the market open, we can expect to see a significant amount of volatility in the NYSE pre-market session as the report comes through.

What Has Contributed To Alibaba’s Revival

Central to Alibaba’s turnaround is its ambitious commitment to AI and cloud infrastructure. The company has pledged RMB 380 billion ($53 billion) through 2027 to bolster its AI capabilities and expand its cloud footprint. Alibaba Cloud Intelligence Group reported 13% year-over-year revenue growth in Q3 FY2025, with AI-related product sales growing at triple-digit rates for six consecutive quarters.

The launch of advanced models like Qwen2.5-Max, touted as outperforming OpenAI’s GPT-4o in benchmarks, and the open-source video-generation model Wan 2.1 have reinforced Alibaba’s technological edge and fueled bullish sentiment.

These advancements are not just technological showpieces; they underpin Alibaba’s efforts to monetise AI through cloud services and to differentiate its offerings amid intensifying competition from domestic rivals like DeepSeek, JD.com, and PDD Holdings, as well as global giants such as Amazon and MercadoLibre. .

While AI and cloud are the engines of future growth, Alibaba’s core e-commerce platforms, Taobao and Tmall, remain vital. Initiatives such as the RedNote partnership, which integrates social media-driven shopping, have helped stabilise user engagement, especially among Gen-Z consumers. Customer management revenue in these segments grew 9% in Q3 2025, demonstrating resilience despite aggressive competition from PDD’s Temu and ByteDance’s Douyin.

Internationally, Alibaba’s platforms like Lazada and Trendyol are nearing profitability, offsetting losses in cross-border ventures such as AliExpress. Strategic partnerships, including the much-anticipated deal to provide AI services for Apple’s iPhones in China, could unlock new revenue streams and deepen Alibaba’s integration into global tech ecosystems.

What Next?

Morgan Stanley have just added BABA as a ‘catalyst driven idea' leading into the print, with the expectation that cloud revenue growth could prove to be the next catalyst in price action. The analyst currently holds a $180 price target, and Overweight rating.

The technical outlook is also bullish, with the 50-day EMA crossing above the 200-day EMA, a classic “golden cross” signal, while the MACD and RSI (67.6) indicate sustained momentum without overbought conditions. Key support sits at $122.91, with resistance at the $140 level, then up to the 52 week high $148.43.

Despite these positives, risks remain. Price wars in cloud services, particularly from DeepSeek’s ultra-low-cost AI offerings, threaten margins. E-commerce competition is intensifying, and regulatory or geopolitical shocks could still derail progress. Free cash flow has also lagged, missing expectations by nearly 19% in Q3.