Alibaba Group Holding Ltd. (9988) AI Stock Analysis

• Market Cap: HK$3.23T
• Dividend Yield: 1.34%
• Average Volume (3M): 137.35M
• Price to Earnings (P/E): 23.1
• Beta (1Y): 1.59
• 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: 19,099,262,000
• 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$198.02
• Price Target Upside: 20.30% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 20
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: HK$181.00 ▲(9.96% 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

Ecosystem & consumer reach

Daily engagement above 100M users in quick commerce reflects deep platform stickiness and broad consumer reach. That scale creates durable network effects for merchants, lowers customer acquisition costs, and enables sustained cross-selling across Alibaba’s payments, ads, and logistics ecosystem.

Cloud and AI revenue traction

Consistent high-teens to double-digit cloud and AI growth shows structural shift toward higher-value enterprise services. Strong external customer growth and repeated AI adoption indicate scalable, sticky revenue streams that can improve long-term margin mix and diversify reliance on consumer retail cycles.

Prudent balance sheet and ROE

Low leverage and a healthy ROE signal financial resiliency and efficient capital use. A solid equity base enhances capacity to fund strategic investments, weather cyclical revenue swings, and support longer-term initiatives without immediately compromising solvency or strategic optionality.

Negative Factors

Free cash flow weakness

Significant FCF outflow driven by aggressive investment reduces internal funding for operations and shareholder returns. Persistently negative free cash flow can force reliance on balance sheet buffers or external financing, constraining flexibility for M&A, buybacks, or sustained higher capex pacing.

Earnings margin compression from investments

A near-term 78% EBITA decline from strategic spending materially compresses operating profitability. While investments aim to drive future growth, such steep margin deterioration raises execution risk and could persistently lower operating leverage if monetization of those investments lags expectations.

Regulatory constraints on marketplace practices

New rules curbing platform merchant coercion and promotional practices represent structural regulatory tightening. This can reduce promotional leverage, limit fee extraction or merchant onboarding tactics, and pressure unit economics for marketplace monetization across China-facing e-commerce operations.

Alibaba Group Holding Ltd. 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 Marketplace, a social commerce platform; Tmall, a third-party online and mobile commerce platform for brands and retailers; Alimama, a 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 self-operated retail chain; and Tmall Global, an import e-commerce platform. The company also operates Taoxianda, an online-offline integration service for FMCG brands and third-party grocery retail partners; 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 and big data, and IoT services. Additionally, it operates Youku, an online video platform; 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; and Tmall Genie smart speaker. 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 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: Positive
• Last Price: 164.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:9988, the sentiment is Positive. The current price of 164.6 is above the 20-day moving average (MA) of 149.26, above the 50-day MA of 152.97, and above the 200-day MA of 134.38, indicating a bullish trend. The MACD of 2.24 indicates Negative momentum. The RSI at 62.07 is Neutral, neither overbought nor oversold. The STOCH value of 86.83 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
9618	74 Outperform	HK$336.51B	10.05	13.71%	3.48%	16.27%	-3.87%
9988	70 Outperform	HK$3.23T	23.13	12.42%	1.34%	4.89%	50.48%
3690	68 Neutral	HK$620.33B	-266.67	-1.32%	―	11.91%	-106.71%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
9991	46 Neutral	HK$1.41B	-6.20	-5.29%	―	5.91%	9.24%

Alibaba Group Holding Ltd. Corporate Events

Alibaba Grants New Employee Share Awards Under 2024 Equity Plan

Alibaba Group Holding Ltd. has granted share-based awards involving 2,277,600 underlying shares, equivalent to about 0.01% of its issued share capital (excluding treasury shares), to certain employees under its 2024 equity incentive plan. The awards, granted on 23 December 2025 at no purchase price and with a reference closing share price of HK$147.20, feature mixed vesting schedules of up to four years, do not include performance targets, and are subject to a robust clawback mechanism covering misconduct and breaches of covenants; the company confirmed that no directors, chief executives, substantial shareholders, related entity participants or service providers are among the grantees, that individual limits under Hong Kong listing rules are not breached, and that ample capacity remains under the 2024 plan with over 403 million shares available for future grants, underscoring Alibaba’s continued use of equity incentives to retain and motivate staff without materially diluting existing shareholders.

The most recent analyst rating on (HK:9988) stock is a Buy with a HK$164.00 price target. To see the full list of analyst forecasts on Alibaba Group Holding Ltd. stock, see the HK:9988 Stock Forecast page.

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.

The most recent analyst rating on (HK:9988) stock is a Buy with a HK$231.00 price target. To see the full list of analyst forecasts on Alibaba Group Holding Ltd. stock, see the HK:9988 Stock Forecast page.

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.

The most recent analyst rating on (HK:9988) stock is a Buy with a HK$171.00 price target. To see the full list of analyst forecasts on Alibaba Group Holding Ltd. stock, see the HK:9988 Stock Forecast page.

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.

The most recent analyst rating on (HK:9988) stock is a Buy with a HK$199.00 price target. To see the full list of analyst forecasts on Alibaba Group Holding Ltd. stock, see the HK:9988 Stock Forecast page.

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.

The most recent analyst rating on (HK:9988) stock is a Buy with a HK$199.00 price target. To see the full list of analyst forecasts on Alibaba Group Holding Ltd. stock, see the HK:9988 Stock Forecast page.

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.

The most recent analyst rating on (HK:9988) stock is a Buy with a HK$199.00 price target. To see the full list of analyst forecasts on Alibaba Group Holding Ltd. stock, see the HK:9988 Stock Forecast page.