Alibaba stock surged due to strong Q3 performance, AI growth, and continued momentum

From Nasdaq: 2025-02-28 03:50:00

Alibaba’s stock (BABA) surged after a strong fiscal third-quarter performance, with e-commerce and AI growth driving the rebound. The stock has rallied about 70% year-to-date and almost doubled in the past year.

Alibaba’s e-commerce segment saw a 5% growth in Q3, reaching $18.6 billion, with a 9% increase in third-party business. The company’s cloud computing revenue rose by 13% to $4.3 billion, with AI-related revenue soaring by triple digits.

Alibaba continues to invest in AI infrastructure and aims to achieve artificial general intelligence, with strong revenue growth in its emerging businesses. The company reported an 8% increase in revenue to $38.4 billion, and free cash flow stood at $5.3 billion.

Alibaba’s turnaround efforts in e-commerce are paying off, reflecting in revenue and EBITA growth. The company remains a leader in AI in China and is expanding its cloud computing unit. With a low valuation and profitability improvements expected in its AIDC business, Alibaba remains an attractive investment opportunity.

Investors are encouraged to seize the opportunity with Alibaba’s stock trading at an undervalued forward P/E ratio under 15 for fiscal 2026 estimates. The Chinese government’s support for tech companies in the AI race further boosts Alibaba’s growth prospects, making it an appealing investment option.



Read more at Nasdaq: Alibaba Shares Jump on AI Gains as Momentum Continues. Is It Too Late to Buy the Stock?