Cloud business and buyback outweigh risks: Alibaba shares rise 12% following earnings report

Despite a decline in free cash flow due to increased capital expenditure, Alibaba’s quarterly report was received positively by investors. Confidence that the company’s investment strategy will deliver long-term growth supports BABA’s share price.

Alibaba Group Holding Limited (NYSE: BABA) reported revenue growth of 2% to 34.6 billion USD, below analyst expectations; however, organic growth was around 10% after excluding divested assets. The key driver was the cloud segment, which grew by 26% year-over-year, supported by rising demand for AI products and active infrastructure investment. GAAP net profit rose 76% to 5.9 billion USD, though a substantial portion of this was attributable to one-off income, while adjusted profit fell 18% to 4.91 billion USD, reflecting pressure from price competition in the quick commerce segment and higher internal costs. Free cash flow turned negative amid investments in cloud and quick commerce, weighing on financial stability in the past quarter.

Investor reaction to Alibaba’s quarterly report was positive, despite several weaker points. By the close of trading following the release, BABA shares had risen 12%, as the market responded favourably to robust growth in the cloud segment, improved GAAP profitability, and an active share buyback. Market participants focused on long-term signals: accelerating cloud growth, development of AI products, capital return to shareholders, and high balance sheet liquidity. Negative elements of the report were largely ignored or considered short-term effects of substantial investments. As a result, the report reinforced expectations for Alibaba’s growth recovery in H2 2025 and marked a return of institutional investor interest following a prolonged consolidation in the 65–117 USD range.

This article reviews Alibaba Group Holding Limited, outlines its primary revenue sources, presents a fundamental analysis of Alibaba (BABA), and offers a technical analysis of BABA shares, forming the basis for the Alibaba Group stock price 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

On 20 February 2025, Alibaba Group Holding Limited published its quarterly earnings report for the period ended 31 December 2024. The key highlights are outlined below:

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

The Cloud Intelligence Group division remained a significant contributor to growth, with strong demand for AI-related products playing a crucial role.

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 came from weakening consumer activity in China and intensifying competition.

Alibaba’s management expressed confidence in achieving a return to double-digit revenue growth in the second half of 2025. This was expected to be driven by continued investment in cloud technology and artificial intelligence. The company’s strategic focus on innovation and digital transformation provided a firm foundation for further expansion.

Alibaba Group Holding Limited June quarter 2025 report

On 29 August 2025, Alibaba Group Holding Limited published its results for the June quarter 2025, ended 30 June. Key figures are as follows:

• Revenue: 34.57 billion USD (+2%)
• Net income: 5.92 billion USD (+76%)
• Earnings per share: 2.51 USD (+82%)

Revenue by segment:

• Alibaba China E‑commerce Group: 19.55 billion USD (+10%)
• Alibaba International Digital Commerce Group: 4.85 billion USD (+19%)
• Cloud Intelligence Group: 4.66 billion USD (+26%)
• All others: 8.18 billion USD (-28%)

Against the backdrop of slowing domestic consumer demand and increased investment in strategic priorities, Alibaba delivered mixed results for the June quarter 2025. Total revenue grew by just 2% year-on-year to 247.65 billion CNY (34.57 billion USD), falling short of analysts’ expectations. However, after excluding divested assets Sun Art and Intime, organic growth in core segments was approximately 10%, signalling continued domestic business transformation.

The most positive momentum came from the cloud segment, where revenue increased by 26% year-on-year, driven by rising demand for AI solutions and ongoing investment in proprietary infrastructure. The company is advancing its own large language models under the Qwen brand and continues to develop specialised AI chips, aiming to reduce dependency on suppliers such as NVIDIA. The international segment, including AliExpress, Trendyol, and Cainiao, also delivered strong year-on-year growth of 19%, supported by expansion in key regions and strengthened logistics capabilities.

The domestic e‑commerce segment (China) grew by 10%, although margins came under pressure due to aggressive investment in instant-commerce initiatives. Alibaba faces intense competition from Meituan and JD.com in the rapid delivery space, resulting in higher costs and reduced operational efficiency. Management expects this segment to contribute up to 1 trillion CNY (139.6 billion USD) in Gross Merchandise Value (GMV) annually over the next three years, even though it currently weighs on profitability.

GAAP net income rose 78% to 43.1 billion CNY (6.01 billion USD), largely due to one-off gains from the sale of the Trendyol stake and investment revaluations. Adjusted profit, however, fell 18% to 4.91 billion USD, and EBITDA declined 14%, providing a clearer picture of underlying operational performance.

No specific guidance was provided on revenue, margins, or investment expenditures. However, in the accompanying commentary, management emphasised continued active investment in two strategic pillars:

Consumption and AI + Cloud. CapEx and cash outflows are expected to be above normal in the upcoming quarters due to investments in cloud and AI infrastructure, with effects expected to normalise as monetisation, particularly in cloud, progresses. Management anticipates further acceleration in cloud growth driven by GenAI workloads. In e‑commerce, focus remains on growing the user base and order volume, followed by monetisation. For the international segment, emphasis is placed on strengthening positions in key regions (Europe, the Middle East, and Korea), enhancing efficiency (AliExpress, Trendyol), and further integrating logistics (Cainiao).

Fundamental analysis of Alibaba Group Holding Limited

Below is a fundamental analysis of BABA based on the June quarter 2025 results:

• Balance sheet and liquidity: as of 30 June 2025, the company held 81.8 billion USD in cash and other liquid assets. Interest-bearing debt stood at around 32.4 billion USD, including bank loans and bonds. The net cash position was positive at approximately 49 billion USD, meaning liquid assets cover debt by more than 2.5 times. Current assets were 95.8 billion USD versus current liabilities of 66.1 billion USD, corresponding to a current ratio of around 1.45. With this balance sheet structure, the company faces no refinancing pressure and retains a buffer for investment and share buybacks
• Operating profitability: the investment cycle temporarily suppresses cash flows. In the past quarter, revenue was 34.6 billion USD; operating profit was 4.9 billion USD (margin around 14%); adjusted EBITDA was 6.4 billion USD (margin around 18%). Operating cash flow was 2.9 billion USD, while free cash flow showed an outflow of 2.6 billion USD due to elevated CapEx of 5.4 billion USD on cloud/AI infrastructure and rapid delivery scaling. Taken together, this indicates that the company is in an investment phase: the operating model remains profitable, but FCF may remain volatile in the coming quarters due to high capital expenditures
• Debt structure and interest coverage: Alibaba generates significant interest and investment income and maintains a positive net cash position, minimising debt servicing risks even if FCF temporarily weakens. No substantial short-term debt maturities that could pressure liquidity were identified in the report
• Capital return: share buybacks and dividend payments continue, but their pace and scale depend on investment requirements. During the past quarter, 815 million USD worth of shares were repurchased, with a remaining available buyback amount of 19.3 billion USD through March 2027. Given the priority on investments in cloud and AI, the scale of buybacks is likely to adjust flexibly to the FCF trajectory

Conclusion of Alibaba’s fundamental analysis: the company’s financial resilience is high: it maintains a positive net cash position, a substantial level of liquid assets, generates profits from multiple sources, and operations remain profitable even amid significant investment. In the near term, free cash flow may face pressure from elevated capital expenditure and intense competition in instant delivery and marketing. However, in the medium term, this effect is partially offset by accelerated cloud growth and monetisation of AI services. At a share price of 135 USD, the market already prices in improvements but does not reflect the most optimistic scenario; further growth potential depends more on accelerated cloud expansion and reduced investment intensity than on a recovery in traditional e‑commerce.

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

• Barchart: 19 out of 22 analysts rated Alibaba Group’s shares a Strong Buy, 1 a Moderate Buy, 1 a Hold, and 1 a Strong Sell. The upper forecast reaches 180 USD, with the lower bound at 135 USD
• MarketBeat: 12 out of 14 specialists assigned a Buy rating and 2 a Hold. The forecast range spans from 135 USD to 180 USD
• TipRanks: 14 out of 15 professionals rated the shares a Buy and 1 a Hold. Forecasts extend from 135 USD at the lower end to 176 USD at the upper end
• Stock Analysis: 3 out of 11 experts rated the shares a Strong Buy, 7 a Buy, and 1 a Hold. Forecasts range from 135 USD to 180 USD

Alibaba Group Holding Limited stock price forecast for 2025

From November 2021 to February 2025, Alibaba’s shares traded within a range of 65–117 USD. In February 2025, the price made its first breakout above the upper boundary, but it was unable to consolidate above 117 USD and returned to the channel. In April, a second attempt to break higher also failed. After the release of the March-quarter results, the shares fell back below 117 USD. The third breakout occurred in July, and this time the June-quarter earnings underpinned the upward move, allowing the price to approach the local high of 144 USD. Based on this trading pattern, the potential scenarios for Alibaba Group Holding Limited’s stock performance in 2025 are as follows:

The forecast for Alibaba Group Holding Limited’s shares suggests the upward trajectory could continue, with the next upside target at 170 USD. If this resistance is breached, the subsequent upside level may be the upper boundary of the ascending channel around 200 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

Open Account