Alibaba Group Holding Ltd. (9988) AI Stock Analysis

• Market Cap: HK$2.75T
• Dividend Yield: 1.34%
• Average Volume (3M): 137.35M
• Price to Earnings (P/E): 19.7
• Beta (1Y): 1.56
• Revenue Growth: 4.89%
• EPS Growth: 50.48%
• Country: HK
• Employees: 124,320
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 0.60
• Shares Outstanding: 19,088,957,000
• 10 Day Avg. Volume: 127,150,115
• 30 Day Avg. Volume: 137,353,147
• PEG Ratio: 0.23
• Price to Book (P/B): 2.22
• Price to Sales (P/S): 2.25
• P/FCF Ratio: 28.92
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: HK$202.38
• Price Target Upside: 38.62% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 22
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: HK$164.00 ▲(12.33% Upside)

Alibaba's strong financial performance, particularly in revenue growth and profitability, is a key strength. However, technical indicators suggest bearish momentum, and the earnings call revealed significant investment-related declines in EBITA and cash flows. The moderate valuation and dividend yield provide some support, but overall, the stock faces challenges that temper its attractiveness.

Positive Factors

AI and Cloud Business Expansion

Alibaba's strong growth in its cloud and AI sectors indicates a robust demand for its services, positioning it well for future technological advancements and market leadership in these high-growth areas.

Quick Commerce Growth

The rapid growth in quick commerce demonstrates Alibaba's ability to capitalize on consumer trends and improve unit economics, which could enhance profitability and competitive positioning in the e-commerce space.

New Product Launch

The launch of AI-integrated smart glasses showcases Alibaba's innovation capabilities and potential to capture market share in the growing AI wearables sector, enhancing its product portfolio.

Negative Factors

Decrease in Total Adjusted EBITA

A significant drop in EBITA due to strategic investments could strain Alibaba's profitability, impacting its ability to reinvest in growth initiatives and maintain financial health.

Operating Cash Flow Decline

A substantial decline in operating cash flow may hinder Alibaba's capacity to fund operations and strategic investments, potentially affecting its long-term growth prospects.

Pentagon Concerns

Being associated with military support could lead to increased regulatory scrutiny and potential restrictions, impacting Alibaba's operations and investor sentiment in the U.S. market.

Alibaba Group Holding Ltd. Business Overview & Revenue Model

Company Description

Alibaba Group Holding Ltd. is a leading Chinese multinational conglomerate specializing in e-commerce, retail, internet, and technology. Founded in 1999 by Jack Ma and others, Alibaba operates through various segments, including its core e-commerce platforms such as Taobao and Tmall, cloud computing services through Alibaba Cloud, digital media, and entertainment. The company facilitates transactions between buyers and sellers, providing a comprehensive ecosystem that supports online shopping, payment processing, logistics, and more.

How the Company Makes Money

Alibaba generates revenue through several key streams. The primary source of income comes from its e-commerce platforms, which charge merchants fees for listing products and taking a percentage of sales made through their platforms. Alibaba also earns significant income from its cloud computing division, Alibaba Cloud, which offers a range of services including data storage, computing power, and data analytics, billed on a subscription or usage basis. Additionally, the company generates revenue from digital media and entertainment, primarily through advertising and subscriptions. Strategic partnerships with various businesses, along with its investment in logistics and payment processing through Alipay, further enhance its revenue potential. The company's diversified business model enables it to tap into various markets and continuously innovate, contributing to its overall financial growth.

Alibaba Group Holding Ltd. Financial Statement Overview

Summary

Alibaba Group shows strong revenue growth and profitability with a robust balance sheet. However, challenges in cash flow generation and slight cost pressures need monitoring.

Income Statement

Alibaba Group has demonstrated strong revenue growth, with a TTM revenue growth rate of 44.3%, indicating robust expansion. The company maintains healthy profitability margins, with a gross profit margin of 41.18% and a net profit margin of 14.63% in the TTM period. The EBIT margin of 18.29% and EBITDA margin of 18.82% further highlight operational efficiency. However, the slight decline in EBIT and EBITDA margins compared to the previous annual report suggests potential cost pressures.

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 (ROE) of 14.72% in the TTM period shows effective use of shareholder funds. The equity ratio stands at 54.89%, suggesting a strong equity base relative to total assets. However, the slight increase in debt levels warrants monitoring.

Cash Flow

Alibaba's cash flow statement shows a decline in free cash flow growth, with a negative growth rate of -60.43% in the TTM period, which could impact future investment capabilities. The operating cash flow to net income ratio of 1.03 indicates adequate cash generation relative to net income. The free cash flow to net income ratio of 0.40 suggests a need for improvement in cash conversion efficiency.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.00T	996.35B	941.17B	868.69B	853.06B	717.29B
Gross Profit	412.15B	398.06B	354.85B	318.99B	313.61B	296.08B
EBITDA	188.35B	207.51B	164.01B	153.11B	128.23B	217.96B
Net Income	146.37B	130.11B	80.01B	72.78B	62.25B	150.58B
Balance Sheet
Total Assets	1.85T	1.80T	1.76T	1.75T	1.70T	1.69T
Cash, Cash Equivalents and Short-Term Investments	416.42B	428.09B	571.03B	524.47B	455.08B	483.44B
Total Debt	232.10B	248.11B	205.61B	195.57B	176.60B	181.44B
Total Liabilities	753.77B	714.12B	652.23B	630.12B	613.36B	606.58B
Stockholders Equity	1.01T	1.01T	986.54B	989.66B	948.48B	937.47B
Cash Flow
Free Cash Flow	25.90B	77.54B	149.66B	165.40B	89.44B	188.60B
Operating Cash Flow	150.54B	163.51B	182.59B	199.75B	142.76B	231.79B
Investing Cash Flow	-131.26B	-185.41B	-21.82B	-135.51B	-198.59B	-244.19B
Financing Cash Flow	-59.36B	-76.22B	-108.24B	-65.62B	-64.45B	30.08B

Alibaba Group Holding Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 146.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:9988, the sentiment is Negative. The current price of 146 is below the 20-day moving average (MA) of 151.84, below the 50-day MA of 157.97, and above the 200-day MA of 132.87, indicating a neutral trend. The MACD of -3.11 indicates Positive momentum. The RSI at 38.83 is Neutral, neither overbought nor oversold. The STOCH value of 20.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:9988.

Alibaba Group Holding Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3690	74 Outperform	HK$608.10B	-267.99	-1.32%	―	11.91%	-106.71%
9618	74 Outperform	HK$321.99B	9.62	13.71%	3.49%	16.27%	-3.87%
9988	70 Outperform	HK$2.75T	19.74	12.42%	1.34%	4.89%	50.48%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
9991	44 Neutral	HK$1.26B	-5.49	-5.29%	―	5.91%	9.24%

Alibaba Group Holding Ltd. Corporate Events

Alibaba Announces Grant of Awards Under 2024 Plan

Alibaba Group Holding Ltd. announced the grant of awards under its 2024 Plan, involving 6,115,830 underlying shares, representing approximately 0.03% of the total shares in issue. These awards, granted to certain employees, have a mixed vesting schedule of up to five years and are not subject to shareholder approval. The grant does not exceed the 1% individual limit under Hong Kong Listing Rules and includes a clawback mechanism to ensure compliance and accountability.

Alibaba’s Strategic Investments Impact Q3 2025 Financial Results

Alibaba Group announced its financial results for the quarter and six months ending September 30, 2025, highlighting a strategic investment phase in AI technologies and e-commerce platforms. Despite a 5% increase in revenue to RMB247,795 million, the company experienced an 85% decrease in income from operations due to significant investments in quick commerce and cloud infrastructure. The AI and Cloud business saw robust growth, with AI-related product revenue achieving triple-digit growth for the ninth consecutive quarter. However, net income decreased by 53% year-over-year, and free cash flow turned negative, reflecting the company’s focus on long-term strategic investments.

Alibaba Files Form 13F with SEC, Revealing Investment Holdings

Alibaba Group Holding Ltd. announced the filing of a Form 13F with the U.S. Securities and Exchange Commission, detailing its holdings in publicly traded companies as an institutional investment manager for the quarter ended September 30, 2025. This filing is significant as it reflects Alibaba’s investment activities and compliance with regulatory requirements, potentially impacting its market positioning and providing insights to stakeholders about its investment strategies.

Alibaba to Announce Financial Results for Q3 and H1 2025

Alibaba Group Holding Limited has announced a board meeting scheduled for November 24, 2025, to approve the company’s unaudited financial results for the three and six months ended September 30, 2025. The results will be announced on November 25, 2025. This meeting and subsequent announcement are significant as they provide insights into Alibaba’s financial health and operational performance, impacting investor decisions and market perceptions.

Alibaba Registers Additional Shares for Equity Incentive Plan

Alibaba Group Holding Limited announced the filing of a Form S-8 with the U.S. Securities and Exchange Commission to register an additional 100 million ordinary shares under its 2024 Equity Incentive Plan. This move is part of Alibaba’s strategy to incentivize and retain talent, potentially impacting its operational capabilities and market competitiveness.

Alibaba Completes $3.2 Billion Convertible Notes Offering

Alibaba Group Holding Ltd. has completed a US$3.2 billion offering of Zero Coupon Convertible Senior Notes due 2032, aimed at non-U.S. investors in offshore transactions. The proceeds will be used to enhance Alibaba’s cloud infrastructure and international commerce operations, reflecting its strategic focus on strengthening these areas. The initial conversion rate is set at 5.1773 American Depositary Shares per US$1,000 principal amount, with measures in place to mitigate potential dilution effects. This move underscores Alibaba’s commitment to bolstering its technological and global market presence.

Alibaba Group Announces $3.2 Billion Convertible Notes Offering

Alibaba Group has announced the pricing of a $3.2 billion offering of zero coupon convertible senior notes, aimed at non-U.S. investors. The proceeds will be used to enhance cloud infrastructure and international commerce operations, with 80% allocated to cloud infrastructure improvements. This strategic move is part of Alibaba’s efforts to optimize its capital structure and reduce overall capital costs, while maintaining a strong credit profile.

Alibaba Announces $3.2 Billion Convertible Notes Offering to Boost Cloud and International Operations

Alibaba Group Holding Ltd. announced a proposed offering of approximately $3.2 billion in Zero Coupon Convertible Senior Notes due 2032, aimed at non-U.S. investors in offshore transactions. The proceeds from this offering will primarily be used to enhance Alibaba’s cloud infrastructure capabilities and international commerce operations, with 80% allocated to cloud infrastructure improvements and 20% to expanding international commerce. This strategic move is expected to lower the company’s overall cost of capital and strengthen its market position.