Alibaba (BABA) will report Q4 FY26 earnings tomorrow, May 13, before the market opens. The stock is down about 6% so far this year amid strong competition from rivals like PDD Holdings (PDD), weak Chinese economy, and investor concerns over heavy AI spending. Wall Street analysts expect Alibaba to post earnings per share of $0.90 in Q4, down from $1.83 in the year-ago quarter. Meanwhile, revenue is projected at about $36.35 billion, representing a 12% year-over-year increase.
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Alibaba’s future increasingly depends on its push into AI, especially its Qwen models. Investors are watching closely to see whether heavy AI spending can further strengthen the company’s cloud business and help it become a bigger growth driver.
Analysts’ Views on BABA Ahead of Q4 Results
Ahead of Alibaba’s Q4 results, Morgan Stanley said Alibaba is strengthening its position in China’s AI market, helped by growing adoption of its Qwen AI model. The firm said the e-commerce giant is benefiting from its broad AI offerings across cloud, models, and applications, making it a leading choice for companies increasing AI spending.
Meanwhile, last month Macquarie analyst Ellie Jiang slightly lowered the price target on Alibaba to $175.90 from $176.20 while maintaining an Outperform rating. The analyst expects Alibaba’s cloud business to remain a key growth area in the fourth quarter, supported by rising enterprise adoption of AI and higher usage of its Qwen models. At the same time, Jiang also said Alibaba’s core e-commerce business could face slower growth as the company focuses more on branded merchants.
Although the firm cut earnings estimates to reflect higher AI investment and training costs, it kept its bullish view on Alibaba, citing solid progress in AI.
Options Traders Anticipate 6.88% Move
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.
Indeed, it currently says that options traders are expecting a 6.88% move in either direction.
Is Alibaba Stock a Buy Now?
Wall Street remains constructive on the stock. Alibaba carries a Strong Buy consensus rating based on 14 Buy ratings and two Holds over the past three months. The average BABA price target stands at $184.07, suggesting roughly 34.07% upside from current levels.
