Alibaba beats Q4 earnings, shows strong growth in cloud and AI sectors

From Nasdaq: 2025-05-19 10:31:00

Alibaba Group (BABA) surpassed earnings estimates in Q4 of fiscal 2025, despite slightly missing revenue estimates. The company reported 23% year-over-year earnings growth, with revenues of $32.6 billion, showing a 7% increase. With a focus on e-commerce and AI+Cloud, Alibaba’s strategic positioning and financial results make it an attractive investment opportunity.

Alibaba’s Cloud Intelligence Group demonstrated strong momentum, with cloud revenues growing 18% year over year and AI-related product revenues maintaining triple-digit growth for the seventh consecutive quarter. The company’s investments in AI infrastructure and technology highlight its leadership in the cloud computing and AI sectors, positioning it for significant market share growth.

Despite strong performance metrics, Alibaba trades at a significant discount to peers, with a forward 12-month Price/Earnings ratio of 11.07X. The company has outperformed the industry, the Retail-Wholesale sector, and the S&P 500, yet remains undervalued compared to comparable tech giants like Amazon, Microsoft, and Google. Alibaba’s commitment to shareholder returns further enhances its investment case.

Alibaba’s financial strength, core e-commerce business performance, accelerating cloud and AI segments, and expanding international commerce operations make it a compelling investment opportunity. With a strong net cash position, Alibaba is well-positioned for long-term growth, offering both value and growth potential to investors. BABA stock currently carries a Zacks Rank #2 (Buy).

Experts have identified 7 elite stocks, including Alibaba Group Holding Limited (BABA), as the “Most Likely for Early Price Pops.” These hand-picked stocks have historically outperformed the market with an average gain of +23.0% per year since 1988. With a track record of success, these stocks, including BABA, are worth considering for potential early price gains.

Read more at Nasdaq: 3 Reasons Why Alibaba Stock May Be a Smart Buy After Q4 Earnings Beat