Artificial intelligence (AI) is the engine of global tech innovation, reshaping industries and drawing billions in investment. While Western giants dominate headlines, China’s tech champions are re-emerging, and Alibaba (BABA) is leading that charge. After years shadowed by regulatory pressures and economic headwinds, Alibaba is shifting gears.

Built on a formidable foundation of e-commerce and cloud services, the company is now aggressively pursuing generative AI, placing it firmly in competition with global heavyweights. In 2025, Alibaba launched advanced iterations of its Qwen 3 large language models, which have already begun scaling enterprise use cases. Its recent partnership with SAP (SAP) , integrating Qwen into SAP’s Generative AI Hub, underscores its rising credibility in enterprise AI across Asia, the Middle East, and Africa.

With Wall Street sentiment turning optimistic and Barchart naming BABA a top-rated AI stock, this might be the one name to own in the AI gold rush of 2025.

About Alibaba Stock

Alibaba Group (BABA) has evolved into a $287 billion tech force. From e-commerce roots with Alibaba.com, Taobao, and Tmall, the company now commands influence across cloud, AI, logistics, and digital services, marking its territory as China’s bold answer to Silicon Valley’s dominance.

BABA stock kicked off 2025 with serious momentum, rocketing from $80.06 in January to a 52-week peak of $148.43 by March. But April brought a sharp pullback to $95.73. Still, Alibaba’s shares are up 37.5% on a YTD basis, reflecting investors’ renewed faith in its e-commerce core and AI-powered cloud edge.

From a valuation standpoint, BABA, priced at just 12.35 times forward adjusted earnings, sits well below the industry median and its five-year average. With analysts projecting double-digit profit growth in fiscal 2026, this discounted price is not a bargain by chance, but a rare green light to jump in before the market catches up.

Taking a Closer Look at Alibaba’s Q4 Earnings Report

Alibaba’s fiscal Q4 2025 earnings results, released on May 15, may have disappointed Wall Street - missing both revenue and profit expectations - but the numbers tell a deeper story of strategic momentum. Revenue rose 6.6% year over year to $32.6 billion, while adjusted earnings per ADS jumped 23% to $1.73 per share, signaling operational strength behind the noise.

Alibaba Cloud delivered a standout quarter, with revenue up 18%, driven by surging demand for AI. For the seventh straight quarter, revenue from AI-linked products grew in triple digits, underlining Alibaba’s growing dominance in enterprise AI. Cloud remains the cornerstone of this AI push, and management is doubling down on LLM innovation and open-source investment.

E-commerce also held firm. Taobao and Tmall gained traction, pushing Alibaba’s 88VIP user base past 50 million. Customer management revenue rose 12%, while adjusted EBITDA improved by 8%. Internationally, cross-border revenue climbed 22%, with the Alibaba International Digital Commerce (AIDC) segment inching closer to profitability by fiscal 2026.

Despite macro pressures and supply chain constraints in AI hardware, Alibaba’s long-term trajectory remains upward. Management remains bullish on AI’s role in sustaining growth, especially as adoption spreads beyond digital-native sectors into manufacturing and traditional industries. Behind the mixed headlines, Alibaba is quietly laying the groundwork for its next chapter, driven by cloud, powered by AI, and backed by operational discipline.

Analysts tracking Alibaba are optimistic, estimating fiscal 2026 profit to surge by 19.5% to $9.87 per share and further climb by 14% to $11.25 per share in fiscal 2027. 

What Do Analysts Expect for BABA Stock?

Wall Street is warming up to Alibaba as its bold AI push, solid financials, and cloud focus cut through the regulatory noise. Analysts are upbeat, with BABA currently rated a “Strong Buy.” Nearly unanimous, of the 20 analysts covering the stock, 19 suggest a “Strong Buy,” and the remaining one advises a “Moderate Buy.”

The mean price target of $159.55 suggests the stock could surge by 37% from the current price levels. The Street-high target of $180 represents potential upside of 55%.