TLDR
- Bank of America analyst Joyce Ju maintains bullish outlook on Alibaba with $146 price target (46.9% upside)
- Alibaba expected to report 7% revenue growth in Q4 FY25 results coming mid-May
- Company expanding global AI offerings through Singapore cloud zones with models like Qwen-Max
- Limited exposure to US tariffs reduces financial risk for the company
- Wall Street consensus shows Strong Buy rating with 68% potential upside
Alibaba’s stock jumped more than 6% in pre-market trading today as investors react to positive analyst coverage ahead of the company’s upcoming earnings report. The Chinese e-commerce and cloud computing giant is making aggressive moves in artificial intelligence while navigating ongoing trade tensions between the US and China.
Bank of America analyst Joyce Ju recently adjusted her price target on Alibaba from $150 to $146 but remains optimistic about the company’s prospects. Even with the slight reduction, her target suggests nearly 47% upside from current trading levels.
Wall Street expects Alibaba to report earnings of $1.71 per share and revenues of $32.68 billion when it releases Q4 FY25 results in mid-May. Ju predicts revenue will grow about 7% year-over-year.
The analyst highlighted strong performance in Alibaba’s core China e-commerce business as a key driver. The company’s cloud segment is also expanding, particularly in AI-related services that are improving monetization and profitability.
Global AI Expansion
Alibaba is not limiting its AI ambitions to China. The company recently rolled out enhanced AI tools through its Singapore cloud infrastructure, featuring two new large language models: Qwen-Max and QwQ-Plus.
These offerings appear designed to compete with Western AI providers but at potentially lower price points. After Chinese AI companies like DeepSeek captured attention earlier this year with ultra-low training costs, Alibaba seems to be following a similar strategy to attract global developers.
The company isn’t stopping there. Reports indicate Alibaba plans to launch Qwen 3, its flagship AI model, later this month. It has also upgraded its Quark AI assistant with expanded capabilities including chatbot functions, reasoning tools, and task execution features.
Price is becoming a key part of Alibaba’s competitive strategy. The company has introduced developer-focused tools at aggressively low prices, including a business intelligence platform for just $1 per year.
Reduced Tariff Risk
One advantage for Alibaba in the current geopolitical climate is its relatively limited exposure to US tariffs. Most of its business remains in China, which reduces some financial risks related to trade tensions.
While the company does sell to the US through its global platform, many of these sales originate from countries other than China. This diversification provides some insulation from direct tariff impacts.
Ju noted that Alibaba is managing its US investments carefully. The company has been shifting more focus toward local supply chains, which adds to its operational stability during uncertain trade conditions.
The analyst maintains a positive outlook on Alibaba’s long-term growth potential. She cites several supporting factors including AI-driven trends, possible consumer stimulus measures in China, and an attractive valuation compared to growth prospects.
Alibaba is also expanding upstream in the AI value chain. New SaaS products like AI Doc, which can analyze legal documents and spreadsheets, and Smart Studio for generating content, show the company’s ambition to become a full-stack AI platform rather than just a cloud infrastructure provider.
The broader Wall Street view on Alibaba remains strongly positive. TipRanks data shows the stock has earned a “Strong Buy” consensus rating based on 16 Buy recommendations over the past three months.
The average price target among these analysts stands at $167.17, suggesting a potential upside of 68% from current trading levels.
Investors appear to be weighing Alibaba’s AI initiatives and growth prospects against the backdrop of ongoing US-China tensions. The stock’s pre-market jump suggests some are betting on the company’s ability to navigate these challenges while capitalizing on AI opportunities.
As Alibaba prepares to unveil its quarterly results next month, market watchers will be looking for confirmation of the growth trajectory outlined by analysts like Ju. Key metrics will include cloud revenue growth and any updates on AI adoption rates among the company’s customers.
The upcoming earnings report may also provide more details on how Alibaba plans to balance its global AI expansion with the complex realities of international trade politics.
