Valued at a market cap of $300 billion, Alibaba (BABA) stock has returned more than 56% in the past 12 months. A key driver of Alibaba stock in 2025 is the company's Qwen AI model, which has outperformed competitors like GPT-4o, establishing the e-commerce giant as a leading artificial intelligence (AI) infrastructure provider in China. 

Moreover, a transformative partnership with Apple (AAPL), which will use Alibaba's AI models for iPhone services in China, has boosted investor confidence.

The company's core e-commerce platforms have returned to growth amid improved consumer sentiment, while its cloud division is experiencing increased demand for AI infrastructure. Founder Jack Ma's public reappearance and engagement with Chinese officials have signaled a regulatory thaw, coinciding with the government's pivot toward pro-growth policies supporting AI development.

Finally, Alibaba's commitment to invest $50 billion in AI infrastructure over three years positions it as a frontrunner in China's AI race and a credible global competitor. All eyes will now be on Alibaba’s upcoming results, scheduled for May 15. Let’s see what Wall Street expects from BABA stock in fiscal Q4 of 2025, which ended in March. 

What's the Forecast for BABA Earnings?

Analysts expect Alibaba to report revenue of $240 billion with adjusted earnings of $12.81 per share in fiscal Q4 of 2025. In the year-ago period, BABA reported revenue of $221.9 billion and earnings of $10.14 per share. So, while revenue is forecast to grow by 8.2% year over year, earnings growth forecast is much higher at 26%. Alibaba has beaten earnings forecasts in three of the last five quarters. Further, the tech stock rose by 8% following its earnings report for Q3 of 2025. 

In the last earnings call, Alibaba highlighted the successful execution of its "user-first, AI-driven" strategy focused on core e-commerce and AI-cloud businesses. Revenue grew by 8% year over year in Q3 to $39.2 billion, driven by notable acceleration in its key segments. The cloud business showed momentum with 13% revenue growth, driven by public cloud products. Its AI-related product revenue maintained triple-digit growth for the sixth consecutive quarter, which shows that Alibaba’s AI offerings are fast gaining traction. 

Financially, Alibaba's adjusted EBITDA increased 4% to $7.7 billion, while adjusted net income grew 6% to $7.2 billion. The tech behemoth maintained strong capital management, repurchasing $1.3 billion of shares in the quarter and completing $10 billion in repurchases in the first half of the fiscal year, achieving a 5% net reduction in share count over nine months.

What's Driving Growth at Alibaba?

The company's flagship AI model, Qwen2.5-MAX, has achieved industry-leading performance across multiple benchmarks, and over 90,000 Qwen-based derivative models have been developed globally.

In e-commerce, Taobao and Tmall continued strong performance with customer management revenue increasing 9%, driven by online GMV (gross merchandise volume) growth and improved monetization. 

Management announced ambitious plans to scale investments in three key areas: AI and cloud infrastructure, AI foundation models, and transforming existing businesses with AI. The company plans to invest more in cloud and AI infrastructure over the next three years than it has spent in the past decade, positioning itself to capture significant opportunities in the AI era.

With a robust net cash position of $53 billion and strategic divestments of non-core assets like Sun Art and Intime, Alibaba continues strengthening its focus on core businesses while positioning itself as a leader in the AI transformation.

What's the Target Price for BABA Stock?

Analysts tracking BABA stock expect sales to rise from $130 billion in fiscal 2024 to $163 billion in fiscal 2028. Its adjusted earnings are forecast to expand from $8.60 per share to $12.8 per share in this period. 

Today, Alibaba stock is priced at 13.4x forward earnings, below its 10-year average of 21.2x. A more typical valuation of 15x for BABA implies the stock would be worth around $190 in May 2027, indicating an upside potential of 44.3% from current levels. 

Each of the 20 analysts covering BABA stock has a “Strong Buy” recommendation. The 12-month average target price for Alibaba stock is $158.20, around 20.2% above the current trading price.