Analysts Expect About 40% Upside Potential in Alibaba Stock (BABA)

Alibaba (BABA) stock has jumped 42% this year and is up 54% over the past 12 months. The Chinese e-commerce and cloud firm is gaining ground, thanks to its focus on AI and cloud tech. It recently backed its plan to spend 380 billion yuan (about $52.4 billion) over three years to grow its computing power and build out its AI base. Adding to investor hope, Ray Dalio’s Bridgewater Associates recently raised its stake in Alibaba, another sign of strong belief in the stock. With all these signs in play, Wall Street sees close to 40% upside in Alibaba stock from current levels.

Alibaba’s Q4 Earnings Show AI Strength

Alibaba recently reported its Q4 results for Fiscal 2025, which came in a bit below what analysts had hoped for. Still, there were signs of solid growth, especially in cloud and AI.

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.

Top Analyst Remains Positive on Alibaba’s Future

Last week, Macquarie analyst Ellie Jiang kept her Outperform rating and $187.50 price target on Alibaba stock. After a recent visit to the company’s office, the top analyst expressed strong confidence in Alibaba’s future growth prospects.

Jiang pointed out that while the company is lowering prices to stay competitive in the instant delivery space, this short-term move is part of a broader plan to drive growth. She expects higher ad sales and better merchant services to support profits going forward.

On the tech front, Jiang highlighted rising demand for Alibaba’s AI tools, especially from large firms. This, she believes, will help lift cloud revenue in the coming quarters. She also noted that Alibaba’s three-year AI investment plan remains on track, which reflects the company’s steady focus on long-term growth in cloud and AI.

Is Alibaba Stock a Good Buy Right Now?

Analysts 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 37.95% upside potential from current levels.

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