Analysts Remain Optimistic About Alibaba Stock (BABA) Despite Q4 Earnings Miss

Chinese e-commerce giant Alibaba (BABA) stock is down over 8% after delivering mixed Q4 FY25 results yesterday. The company generated revenue of RMB236.4 billion ($32.6 billion), up 7% from the same period last year, but slightly below consensus expectations of RMB237.91 billion. Also, earnings per American Depositary Share (ADS) came in at $1.73, missing estimates.

Despite the overall miss, the company showed strength in key areas. Notably, revenue from customer management on Taobao and Tmall rose 12%, reflecting the positive impact of recent investments in user experience and monetization. Another strong point was Alibaba’s Cloud division. Cloud revenue jumped 18% year-over-year to RMB30.1 billion, supported by robust growth in AI-related product sales, which have now shown triple-digit growth for seven straight quarters. The company also noted growing interest in its open-source AI model series, Qwen3.

Given the strength in cloud and AI, Wall Street analysts are showing confidence in Alibaba by sticking to their Buy ratings.

Wall Street Sees Opportunity in Cloud and AI

Despite the earnings miss, analysts reaffirmed their bullish outlook on Alibaba. Morgan Stanley analyst Gary Yu reiterated an Overweight rating on the stock and kept his price target at $180. He noted that Alibaba’s cloud performance met expectations and continues to be a central part of the company’s growth strategy, especially as AI use expands rapidly across China. Yu added that adjusted EBITDA was 6% above their forecast, offering a positive surprise.

While he believes the stock drop reflects high market expectations for the cloud unit, he remains optimistic about stronger revenue growth in the months ahead. The analyst also expects customer management revenue to keep growing at a double-digit rate, supported by improved take rates.

UBS analyst Kenneth Fong echoed a similar view, maintaining a Buy rating and a $180 price target. He pointed to steady trends in Alibaba’s core commerce business and narrowing losses in non-core areas. Fong also highlighted the continued strength of AI-related revenue, which grew at a triple-digit pace, easing concerns about margin pressure. He added that the launch of DeepSeek has driven stronger demand for Alibaba’s cloud services, reinforcing its position as a long-term growth driver.

Is Alibaba Stock a Good Buy Right Now?

Analysts remain highly bullish about Alibaba’s stock trajectory. With 16 unanimous Buy ratings, BABA stock commands a Strong Buy consensus rating on TipRanks. Also, the average Alibaba price target of $167.13 implies 34.89% upside potential from current levels.

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