Alibaba (BABA) AI Stock Analysis

• Market Cap: $379.58B
• Dividend Yield: 1.21%
• Average Volume (3M): 13.93M
• Price to Earnings (P/E): 21.9
• Beta (1Y): 0.82
• Revenue Growth: 5.14%
• EPS Growth: 50.76%
• Country: US
• Employees: 124,320
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 0.62
• Shares Outstanding: 2,386,079,600
• 10 Day Avg. Volume: 14,454,049
• 30 Day Avg. Volume: 13,934,874
• PEG Ratio: 0.23
• Price to Book (P/B): 2.23
• Price to Sales (P/S): 2.26
• P/FCF Ratio: 29.07
• Enterprise Value/Market Cap: 1.11
• Enterprise Value/Revenue: 0.42
• Enterprise Value/Gross Profit: 1.01
• Enterprise Value/Ebitda: 2.60
• 1Y Price Target: $202.96
• Price Target Upside: 23.56% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 19
• EPS Forecast (FY): 6.51
• Revenue Forecast (FY): $147.00B

• Rating: 73 Outperform
• Price Target: $183.00 ▲(11.41% Upside)

Alibaba's overall stock score reflects strong financial performance and strategic initiatives in AI and cloud, which are expected to drive long-term growth. However, challenges in cash flow management and mixed technical indicators suggest caution. The earnings call provided a positive outlook, but operational losses in quick commerce and high valuation metrics temper enthusiasm.

Positive Factors

AI and Cloud Growth

Alibaba's focus on AI and cloud is driving significant revenue growth, indicating a strong competitive position in these high-demand sectors.

Strategic Partnerships

The partnership with SAP enhances Alibaba's global cloud presence, potentially increasing market share and strengthening its competitive edge.

New Product Launch

The launch of AI-integrated smart glasses positions Alibaba in the growing AI wearables market, expanding its product offerings and innovation capabilities.

Negative Factors

Cash Flow Challenges

Significant cash flow challenges could limit Alibaba's ability to invest in growth opportunities and manage debt, impacting long-term financial health.

Pentagon Review

Being associated with aiding the Chinese military could lead to increased regulatory scrutiny and impact Alibaba's operations and investor sentiment.

Operating Losses in Quick Commerce

Continued losses in quick commerce could strain resources and hinder profitability, affecting Alibaba's ability to sustain growth in this segment.

Alibaba Business Overview & Revenue Model

Company Description

Alibaba Group Holding Limited, through its subsidiaries, provides technology infrastructure and marketing reach to help merchants, brands, retailers, and other businesses to engage with their users and customers in the People's Republic of China and internationally. The company operates through seven segments: China Commerce, International Commerce, Local Consumer Services, Cainiao, Cloud, Digital Media and Entertainment, and Innovation Initiatives and Others. It operates Taobao and Tmall, which are digital retail platforms; Alimama, a proprietary monetization platform; 1688.com and Alibaba.com, which are online wholesale marketplaces; AliExpress, a retail marketplace; Lazada, Trendyol, and Daraz that are e-commerce platforms; Freshippo, a retail platform for groceries and fresh goods; and Tmall Global, an import e-commerce platform. The company also operates Cainiao Network logistic services platform; Ele.me, an on-demand delivery and local services platform; Koubei, a restaurant and local services guide platform; and Fliggy, an online travel platform. In addition, it offers pay-for-performance, in-feed, and display marketing services; and Taobao Ad Network and Exchange, a real-time online bidding marketing exchange. Further, the company provides elastic computing, storage, network, security, database, big data, and IoT services; and hardware, software license, software installation, and application development and maintenance services. Additionally, it operates Youku, an online video platform; Quark, a platform for information search, storage, and consumption; Alibaba Pictures and other content platforms that provide online videos, films, live events, news feeds, literature, music, and others; Amap, a mobile digital map, navigation, and real-time traffic information app; DingTalk, a business efficiency mobile app; Tmall Genie smart speaker; and Qwen, an artificial intelligence chatbot. The company was incorporated in 1999 and is based in Hangzhou, the People's Republic of China.

How the Company Makes Money

Alibaba generates revenue through multiple streams, primarily from e-commerce, which includes transaction fees and commissions from its platforms such as Taobao and Tmall. Advertising services also contribute significantly to its earnings, allowing sellers to promote their products on the platform. Additionally, Alibaba benefits from its cloud computing services, which provide infrastructure and data solutions to businesses, contributing a growing portion of its revenue. The company has established partnerships with various merchants and brands to enhance its ecosystem, further driving sales and service usage. Other revenue sources include logistics services and digital entertainment, allowing Alibaba to diversify its income and leverage its vast user base.

Alibaba Financial Statement Overview

Summary

Alibaba demonstrates strong revenue growth and profitability, supported by a solid balance sheet with low leverage. However, cash flow management presents challenges, particularly with negative free cash flow growth, which could impact future investments or debt repayments.

Income Statement

Alibaba's income statement shows strong profitability with a gross profit margin of 41.18% and a net profit margin of 14.63% for TTM. The company has demonstrated consistent revenue growth, with a notable TTM revenue growth rate of 12.8%. EBIT and EBITDA margins are healthy at 18.29% and 18.82%, respectively, indicating efficient operations. However, the slight decline in EBIT from the previous annual report suggests a need for monitoring operational efficiency.

Balance Sheet

The balance sheet reflects a solid financial position with a low debt-to-equity ratio of 0.23, indicating prudent leverage management. The return on equity is robust at 14.72%, showcasing effective use of equity capital. The equity ratio stands at 54.8%, underscoring a strong equity base. Despite these strengths, the slight increase in debt levels over the past year warrants attention.

Cash Flow

Cash flow analysis reveals challenges, with a negative free cash flow growth rate of -204.04% TTM, highlighting potential cash management issues. The operating cash flow to net income ratio is 1.05, indicating adequate cash generation relative to net income. However, the free cash flow to net income ratio of 0.17 suggests limited free cash flow relative to profits, which could impact future investments or debt repayments.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.01T	996.35B	941.17B	868.69B	853.06B	717.29B
Gross Profit	416.69B	398.06B	354.85B	318.99B	313.61B	296.08B
EBITDA	161.59B	182.67B	164.01B	153.11B	128.23B	217.96B
Net Income	123.35B	130.11B	80.01B	72.78B	62.25B	150.58B
Balance Sheet
Total Assets	1.88T	1.81T	1.77T	1.75T	1.70T	1.69T
Cash, Cash Equivalents and Short-Term Investments	373.57B	464.77B	602.17B	557.62B	491.06B	517.56B
Total Debt	281.59B	248.49B	205.69B	195.63B	176.85B	181.68B
Total Liabilities	772.10B	715.21B	652.46B	630.33B	614.25B	607.40B
Stockholders Equity	1.03T	1.01T	986.89B	990.03B	949.90B	938.77B
Cash Flow
Free Cash Flow	-26.94B	77.54B	149.66B	165.40B	89.44B	188.60B
Operating Cash Flow	129.21B	163.51B	182.59B	199.75B	142.76B	231.79B
Investing Cash Flow	-201.87B	-185.41B	-21.82B	-135.51B	-198.59B	-244.19B
Financing Cash Flow	18.32B	-76.22B	-108.24B	-65.62B	-64.45B	30.08B

Alibaba Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 164.26
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BABA, the sentiment is Positive. The current price of 164.26 is above the 20-day moving average (MA) of 160.09, below the 50-day MA of 168.37, and above the 200-day MA of 135.07, indicating a neutral trend. The MACD of -1.96 indicates Negative momentum. The RSI at 49.29 is Neutral, neither overbought nor oversold. The STOCH value of 69.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BABA.

Alibaba Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BABA	73 Outperform	$379.58B	21.90	12.39%	1.21%	5.14%	50.76%
AMZN	71 Outperform	$2.50T	33.04	24.33%	―	11.48%	50.70%
MELI	71 Outperform	$107.27B	51.65	40.65%	―	38.01%	44.52%
JD	70 Outperform	$43.65B	10.11	13.68%	3.26%	16.17%	-4.37%
PDD	70 Outperform	$164.65B	12.35	30.03%	―	11.25%	-7.28%
CPNG	66 Neutral	$48.68B	126.12	8.73%	―	16.63%	-62.54%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Alibaba Corporate Events

Alibaba Reports October 2025 Share Movements to Hong Kong Exchange

On November 6, 2025, Alibaba Group Holding Limited submitted its monthly return for October 2025 to the Hong Kong Stock Exchange, detailing movements in its authorized share capital and issued shares. The report indicated a slight increase in issued shares, with 357,043 new shares issued, bringing the total to 19,088,637,327 shares. This submission is part of Alibaba’s compliance with the Hong Kong Listing Rules, ensuring transparency and regulatory adherence in its securities movements.

Alibaba Reports September 2025 Share Capital Movements

On October 9, 2025, Alibaba Group Holding Limited submitted its Monthly Return for September 2025 to the Hong Kong Stock Exchange, as required by the Hong Kong Listing Rules. The report detailed movements in its authorized share capital and issued shares, noting an increase of 15,648,800 in issued shares during the month. This submission underscores Alibaba’s compliance with regulatory requirements and reflects its ongoing activities in managing its share capital, which may impact its market positioning and shareholder interests.

Alibaba Completes Successful Exchange Offer for Senior Notes

On October 9, 2025, Alibaba Group announced the completion of its exchange offer for USD-denominated senior unsecured notes issued in November 2024. The exchange offer, which began on September 4, 2025, involved exchanging up to $2.65 billion in aggregate principal amount of its senior notes due in 2030, 2035, and 2054. The offer expired on October 2, 2025, with a high participation rate, as 99.6% of the 2030 and 2035 notes and 99.2% of the 2054 notes were tendered and subsequently canceled. This successful exchange offer is a strategic move for Alibaba, potentially improving its financial flexibility and strengthening its market position.

Alibaba Announces Share Repurchase Update for Q3 2025

On October 2, 2025, Alibaba announced a share repurchase update for the quarter ending September 30, 2025. The company repurchased 17 million ordinary shares, equivalent to approximately 2 million ADSs, totaling US$241 million in the U.S. market. This repurchase resulted in a net decrease of 3 million ordinary shares, or a 0.02% reduction in outstanding shares after accounting for shares issued under the ESOP. As of September 30, 2025, Alibaba had 18,552 million ordinary shares outstanding, with a remaining authorization of US$19.1 billion for its share repurchase program, effective through March 2027. This strategic move is part of Alibaba’s ongoing efforts to enhance shareholder value and optimize its capital structure.

Alibaba’s 2025 AGM Approves Key Resolutions

On September 25, 2025, Alibaba Group Holding Limited held its Annual General Meeting where shareholders approved several key resolutions. These included granting the Board a mandate to issue and repurchase up to 10% of the company’s Ordinary Shares, electing directors Eddie Yongming Wu, Jerry Yang, Wan Ling Martello, and Albert Kong Ping Ng, and appointing PricewaterhouseCoopers as the company’s independent auditors. The resolutions passed with significant majorities, reflecting strong shareholder support and potentially impacting Alibaba’s strategic flexibility and governance structure.

Alibaba Grants Employee Awards Under 2024 Plan

On September 4, 2025, Alibaba Group Holding Limited announced the grant of awards involving 2,477,630 underlying shares to certain employees under its 2024 Plan. This move, which does not require shareholder approval, aims to attract and retain talent by rewarding employees for their contributions to the company. The awards, which have a mixed vesting schedule ranging from 12 months to 4 years, are intended to align the interests of the grantees with those of the company and its shareholders. This strategic initiative is part of Alibaba’s efforts to incentivize employees and ensure the company’s continued success and development.

Alibaba Initiates Exchange Offer for Senior Notes

On September 4, 2025, Alibaba Group announced the commencement of an exchange offer for its outstanding senior notes. This offer, which does not represent new financing, aims to satisfy obligations under a registration rights agreement from November 2024. The exchange offer involves swapping existing notes for new ones with similar terms but without transfer restrictions and registration rights. The offer will expire on October 2, 2025, unless extended, and is detailed in a prospectus filed with the SEC.

Alibaba Reports August 2025 Share Capital Movements

On September 4, 2025, Alibaba Group Holding Limited submitted its monthly return for August 2025 to the Hong Kong Stock Exchange, as required by the Hong Kong Listing Rules. The report detailed movements in the company’s share capital, including a decrease of 6,072,000 in the number of issued shares, primarily due to share repurchases in August 2025. This activity reflects Alibaba’s ongoing efforts to manage its capital structure and could have implications for its market valuation and shareholder returns.