Alibaba disappoints on earnings, but stock outlook remains optimistic

Alibaba Group’s latest quarterly results fell short of analysts’ expectations for both revenue and net income; nonetheless, the outlook for BABA shares remains positive, with a target price of 180 USD.

Alibaba Group Holding Limited (NYSE: BABA) reported its results for the March 2025 quarter, posting strong growth across key areas, particularly in cloud technologies and artificial intelligence-based services. Its Cloud Intelligence Group division delivered an 18% year-on-year increase in revenue, while the Taobao and Tmall e-commerce platforms achieved a 9% rise. International commerce grew by 22%, underscoring the company’s ongoing global expansion.

Despite these gains, both revenue and net profit came in slightly below analysts’ forecasts, resulting in a 7% drop in Alibaba’s share price following the report’s release. Even so, management remains optimistic, projecting a return to double-digit revenue growth in the second half of 2025, driven by continued investment in AI and cloud infrastructure.

This article examines Alibaba Group Holding Limited, outlining its main revenue streams, providing a fundamental analysis of Alibaba Group’s (BABA) earnings report, and offering a technical analysis of BABA shares, which forms the basis for the Alibaba Group’s stock forecast for 2025.

About Alibaba Group Holding Limited

Alibaba Group Holding Limited is the largest Chinese technology company. Founded in 1999 in Hangzhou by Jack Ma (also known as Ma Yun) and his team, the company operates in e-commerce, cloud computing, financial technologies, logistics, and the media and entertainment sectors. Its platforms (AliExpress, Taobao, and Tmall) connect millions of buyers and sellers worldwide. Alibaba is also actively advancing Artificial Intelligence (AI) and innovative technologies, playing a pivotal role in the global digital economy.

Alibaba’s initial public offering (IPO), which raised USD 25.0 billion, took place on 19 September 2014 on the New York Stock Exchange under the ticker symbol BABA. At the time, it was the largest IPO in history.

Alibaba Group Holding Limited’s main financial flows

Alibaba Group’s revenue streams are divided into the following key areas:

• E-commerce: revenues from Alibaba.com, AliExpress, Lazada, Taobao, and Tmall platforms, as well as commissions from sales, advertising services, and subscriptions
• Cloud computing: revenue from Alibaba Cloud for providing cloud solutions, including data storage, AI-based products, analytical forecasts, and corporate technologies
• Logistics: financial proceeds from the services of Cainiao Network, a logistics platform that facilitates domestic and international deliveries
• Media and entertainment: revenue from digital services, such as the streaming platform Youku, film production, content creation, and advertising
• Financial technology: through its partnership with Ant Group, Alibaba generates revenue from providing financial and payment services
• Other services: this includes revenues from Alibaba Health, Lingxi Games, Freshippo, Intime, Sun Art, intellectual information platforms, Fliggy, DingTalk, and other company divisions. Revenue in this segment is mainly derived from direct sales

The main contributor to the financial flow is the e-commerce segment, particularly domestic operations in the Chinese market.

Alibaba Group Holding Limited – September 2024 quarterly earnings report

On 15 November 2024, Alibaba Group Holding Limited released its quarterly results for the period ended on 30 September 2024. The key figures from the report are outlined below:

• Revenue: 33.70 billion USD (+5%)
• Net income: 6.20 billion USD (+63%)
• Earnings per share: 2.59 USD (+69%)

Revenue by segment:

• Taobao and Tmall Group: 14.10 billion USD (+1%)
• Cloud Intelligence Group: 4.22 billion USD (+7%)
• International Digital Commerce Group: 4.51 billion USD (+29%)
• Cainiao Smart Logistics Network: 3.51 billion USD (+8%)
• Local Services Group: 2.52 billion USD (+14%)
• Digital Media and Entertainment Group: 0.81 billion USD (-1%)
• All others: 7.43 billion USD (+9%)

In comments on the results, CEO Eddie Wu highlighted robust revenue growth from cloud solutions and AI products. He also cited strategic agreements with key partners aimed at improving payment and logistics services on the Taobao and Tmall platforms.

Alibaba Group’s net profit for the September 2024 quarter rose by an impressive 63% year-on-year, primarily driven by a positive revaluation of the company’s investments.

The e-commerce segment, which includes the Taobao and Tmall platforms, delivered solid growth supported by double-digit increases in order volumes and revenue from customer services, further strengthening Alibaba’s position in the domestic market. Revenue from Alibaba Cloud increased by 7%, primarily driven by triple-digit growth in income from AI-related products. Cost optimisation and improved operational efficiency across several business units also supported profitability, allowing the company to manage expenses effectively amid ongoing economic uncertainty.

However, despite the rise in net profit, non-GAAP net income, which excludes one-off items such as investment revaluations, declined by 9% to 5.20 billion USD. The company attributed this decline to substantial investments in Alibaba Cloud and refunds to merchants following the cancellation of annual service fees.

Alibaba also rewarded its shareholders with a share buyback worth 4.1 billion USD.

Alibaba Group Holding Limited – December 2024 quarterly earnings report

• Revenue: 38.38 billion USD (+8%)
• Net income: 6.36 billion USD (+333%)
• Earnings per share: 2.93 USD (+13%)

Revenue by segment:

• Taobao and Tmall Group: 18.64 billion USD (+5%)
• Cloud Intelligence Group: 4.34 billion USD (+13%)
• International Digital Commerce Group: 5.17 billion USD (+32%)
• Cainiao Smart Logistics Network: 3.86 billion USD (-1%)
• Local Services Group: 2.32 billion USD (+12%)
• Digital Media and Entertainment Group: 0.75 billion USD (+8%)
• All Others: 7.27 billion USD (+13%)

CEO Eddie Wu highlighted the company’s significant progress in advancing its user-first strategy and harnessing innovative AI technologies. He emphasised that Alibaba remains committed to making substantial investments in cloud technologies and AI infrastructure to maintain its competitive edge.

In the long term, Alibaba plans to invest 53.00 billion USD in cloud computing and AI over the next three years, aiming to become the world’s leading cloud provider.

Although the company did not provide a specific financial outlook for the next quarter, analysts anticipate continued growth. However, the announcement of the 53.00 billion USD investment has raised concerns among investors, as it could weigh on the company’s net profit.

Alibaba Group Holding Limited – March 2025 quarterly earnings report

On 15 May 2025, Alibaba Group Holding Limited published its quarterly report for the period ended 31 March 2025. The key figures are outlined below:

• Revenue: 32.58 billion USD (+7%)
• Net income: 1.65 billion USD (+1203%)
• Earnings per share: 0.71 USD (+296%)

Revenue by segment:

• Taobao и Tmall Group: 13.96 billion USD (+9%)
• Cloud Intelligence Group: 4.15 billion USD (+18%)
• International Digital Commerce Group: 4.62 billion USD (+22%)
• Cainiao Smart Logistics Network: 2.97 billion USD (-12%)
• Local Services Group: 2.22 billion USD (+10%)
• Digital Media and Entertainment Group: 0.77 billion USD (+12%)
• All Others: 7.44 billion USD (+5%)

Alibaba Group Holding’s quarterly report demonstrates steady growth across key areas. The company’s revenue increased by 7% compared with the same period last year. The main driver was the Taobao and Tmall e-commerce platforms, which experienced a 9% growth. The international e-commerce segment also demonstrated resilience, rising 22%, highlighting Alibaba’s ongoing efforts to expand globally.

The Cloud Intelligence Group division continues to be a significant contributor to growth, with strong demand for AI-related products playing a crucial role in driving this growth.

However, despite these strong figures, the company’s net income fell short of analysts’ expectations, causing Alibaba’s shares in the US to drop by 7%. Additional pressure stems from weakening consumer activity in China and intensifying competition.

Alibaba’s management remains confident of achieving a return to double-digit revenue growth in the second half of 2025. This is expected to be driven by ongoing investments in cloud technology and artificial intelligence. The company’s strategic focus on innovation and digital transformation lays a firm foundation for further expansion.

For investors, Alibaba remains an attractive proposition. The tech giant is actively investing in promising sectors despite short-term challenges. This approach indicates strong potential for long-term value creation, making this stock one to watch closely.

Expert forecasts for Alibaba Group Holding Limited’s stock for 2025

• Barchart: all 20 analysts have rated Alibaba Group’s stock as a Strong Buy. The highest target price is 180.00 USD
• MarketBeat: all 15 analysts have issued a Buy rating. The highest target price is 180.00 USD
• TipRanks: all 12 experts have assigned a Buy rating. The highest target price is 180.00 USD
• Stock Analysis: of 14 experts, five have rated the stock as a Strong Buy, eight as Buy, and one as Hold. The highest target price is 180.00 USD

None of the analysts recommended selling Alibaba Group shares.

Alibaba Group Holding Limited stock price forecast for 2025

On the daily timeframe, Alibaba Group’s shares are trading within an upward channel. From 8 April to 14 May 2025, the BABA stock price rose by 40%. However, following the publication of the quarterly report, the shares’ value has dropped and continued to decline. Based on the current performance of Alibaba Group Holding Limited shares, the potential price movements in 2025 are as follows:

An optimistic forecast for Alibaba Group Holding Limited stock suggests a test of the upward trendline at 110 USD, followed by a rebound and a rise to the resistance level at 148 USD. If this resistance is breached, the BABA stock price may reach the upper boundary of the channel at 175 USD.

A negative forecast for Alibaba Group Holding Limited shares implies a break below the trendline at 110 USD. Such a development would increase pressure on the stock. In this case, the first downside target would be the support level at 96 USD. However, there is a strong possibility that the decline in the BABA stock price will continue, potentially pushing the shares down to the next support level at 80 USD.

Risks of investing in Alibaba Group Holding Limited stock

Investing in Alibaba Group may involve several risks, which could be particularly significant amid China’s economic measures and policies. The main risks are listed below:

• Connection with the economic stimulus: if the Chinese government cancels or inadequately stimulates the economy, this could negatively impact Alibaba’s shares
• Global economic conditions: like many large tech companies, Alibaba relies heavily on global markets. For example, economic instability, trade wars, or a decline in global demand could exert pressure on the company’s earnings
• Trade risks: like other Chinese companies, Alibaba faces the risk of trade sanctions from the US. In particular, restrictions on Chinese companies’ access to Western markets, including US-based platforms, could hinder business expansion and reduce profitability
• Regulatory and political risks: like other Chinese tech companies, Alibaba operates under strict control by Chinese authorities. In recent years, the Chinese government has tightened regulations in the technology and internet sectors, which has led to a significant decline in Alibaba’s market capitalisation. The company is also actively expanding its financial services through its subsidiary, Ant Group, which offers lending, mobile payments, and other services. However, the Chinese government has already imposed restrictions on Ant Group’s growth, negatively impacting the company’s stock. At this stage, the realisation of regulatory risks is unlikely, as the Chinese government is implementing measures to stimulate the economy and is unlikely to complicate business operations in the current climate