tiprankstipranks

Alibaba Stock (BABA) Slips Over 3%. Here’s Why

Story Highlights

Alibaba stock fell over 3% in after-hours trading on Friday after a narrow U.S.–China trade deal fell short of market hopes.

Alibaba Stock (BABA) Slips Over 3%. Here’s Why

Alibaba (BABA) dropped more than 3% in after-hours trading on Friday, closing near $115.95. The drop came as U.S.–China trade concerns returned, weighing on investor sentiment.

Elevate Your Investing Strategy:

Trade Talks Fail to Calm Investors

A trade meeting between U.S. and Chinese officials took place last week. The talks raised some early hopes of a breakthrough in trade ties between the two countries. However, those hopes quickly faded once the details came out. The two sides only reached a narrow agreement that focused on rare earth metals, materials used in clean energy tools and high-tech devices.

While these metals are important, the limited scope of the deal left many investors disappointed. Traders were hoping for a broader deal that would ease trade tensions and roll back tariffs on a wide range of goods.

Adding to the doubt, the new deal has not been signed yet. It still needs approval from both President Donald Trump and President Xi Jinping. Until that happens, investors may remain cautious. This uncertainty has weighed on Chinese stocks like Alibaba.

Cloud and AI Shine in Q4

Despite the weak sentiment in the market, Alibaba’s Q4 FY25 report showed some strong spots. While total sales came in just below what analysts had hoped for, cloud and AI-led tools showed real signs of growth.

Cloud revenue jumped 18% year-over-year to RMB30.1 billion, supported by robust growth in AI-related product sales. While the company didn’t specify its AI revenue, it said that AI-related product revenue saw triple-digit growth for the seventh consecutive quarter.

Meanwhile, sales from the Taobao and Tmall Group (TTG) rose 9% in Q4. Also, revenue from customer management services—which includes ads and other tools for sellers—rose 12%, showing stronger merchant demand.

Is Alibaba Stock a Good Buy Right Now?

Though investors wait for clear signs of a full deal that can ease their fears about tariffs, they remain highly bullish about Alibaba’s stock trajectory. With 12 unanimous Buy ratings, BABA stock commands a Strong Buy consensus rating on TipRanks. Also, the average Alibaba price target of $166 implies 47.07% upside potential from current levels.

Disclaimer & DisclosureReport an Issue

1