Key Stats for Alibaba Stock
- 52-Week Range: $104 to $193
- Current Price: $124
- Street Mean Target: $1,300
- Street High Target: $1,751
- Analyst Consensus: 30 Buys / 8 Outperforms / 2 Holds / 1 Underperform
- TIKR Model Target (Dec. 2030): $210
Alibaba Stock Falls 35% From Its High as Cloud Revenue Hits 40% Growth: Is BABA Undervalued?
Alibaba Group (BABA) reported fiscal Q4 2026 results on May 13, posting revenue of RMB 243.38 billion against a year-ago figure of RMB 236.45 billion, a 2.93% year-over-year increase.
Cloud Intelligence Group external revenue grew 40% year-over-year, accelerating from the prior quarter, with AI-related products now accounting for 30% of external cloud revenue.
That was the 11th consecutive quarter of triple-digit growth in AI revenue.
Management disclosed the Cloud unit’s annualized AI revenue run rate has surpassed RMB 35.8 billion, with model and application services ARR expected to cross RMB 10 billion in the June quarter and RMB 30 billion by year-end.
The stock has not responded to that acceleration, and the gap between the cloud story and the share price is where the thesis lives.
Adjusted EBITDA for the quarter came in at RMB 16.44 billion, down 60.7% year-over-year, as the company accelerated investment in AI infrastructure, quick commerce, and technology platforms.
Adjusted EPS of RMB 0.62 missed the street estimate of RMB 5.74 by a wide margin, though GAAP EPS of RMB 10.36 came in above expectations.
The earnings miss is real, but it is the wrong lens.
Alibaba spent its way through the quarter deliberately, with CEO Eddie Wu framing the dynamic on the Q4 2026 earnings call: “Looking to the future, the pathway to achieving a solid return on investment in those factories, in those areas, is very clear.”
Free cash flow was an outflow of RMB 17.3 billion as CapEx accelerated, but management noted net cash stands at approximately $59 billion excluding debt with maturities beyond five years.
The China e-commerce segment contributed RMB 122 billion in revenue, with customer management revenue growing 8% on a like-for-like basis after adjusting for a reclassification of merchant subsidies.
Quick commerce revenue grew 57% year-over-year to around RMB 20 billion, with unit economics improving sequentially and management targeting positive unit economics by the end of fiscal year 2027.
Alibaba also unveiled the Zhenwu M890 AI chip at its Cloud Summit on May 20, three times faster than its predecessor, alongside a multi-year chip roadmap extending through 2028 — a direct challenge to Huawei’s domestic AI chip dominance.
The company separately confirmed it has been cleared by the U.S. Commerce Department to purchase Nvidia H200 chips, though no deliveries have been made as of late May due to Beijing’s push to prioritize domestic chip supply chains.
Wall Street Stays Bullish on BABA Stock Despite the Earnings Miss
Forty analysts cover BABA, and 30 rate it Buy, 8 rate it Outperform, 2 rate it Hold, and 1 rates it Underperform — one of the strongest conviction profiles in Chinese technology.
The street’s read is that near-term margin compression is the price of a multi-year cloud and AI transition, not a sign of structural deterioration.
Looking at forward estimates, consensus expects quarterly EBITDA to rebound to around RMB 35 billion in the June and September 2026 quarters, more than double the RMB 16.44 billion reported in Q4 2026.
By the December 2026 quarter, consensus EBITDA estimates reach approximately RMB 50 billion with margins expanding to around 16%.
Revenue growth is expected to reaccelerate, with the June 2026 quarter consensus at around RMB 268 billion, roughly 8% year-over-year, followed by roughly 9% growth in the September quarter and around 9% in the December quarter.
EPS normalized is forecast to recover sharply, with estimates of RMB 10.20 for June 2026 and RMB 9.55 for September 2026, compared to RMB 0.62 actually reported in Q4 2026.
The fundamental risk the bears carry is execution: heavy investment produces accelerating cloud revenue but has not yet demonstrated the margin recovery path management is guiding toward.
Is Alibaba Stock Undervalued? TIKR’s $210 Model Targets Around 69% Upside
TIKR’s base case values Alibaba at approximately $210 by March 2031, implying around 69% total return from the current price of $124, or roughly 12% annualized over approximately five years.
The low scenario, assuming around 9% revenue CAGR and an 11% net income margin, produces a stock price of approximately $196 with a total return of around 58% — still meaningfully above today’s price.
The base case assumes around 10% revenue CAGR and a roughly 12% net income margin, reaching approximately $259 by March 2035 in the extended model view, with an IRR of around 9%.
The high scenario, at around 11% revenue CAGR and roughly 13% net income margin, targets approximately $331 with total return of around 167%.
All three scenarios imply positive returns from current levels, which is the analytical point: even conservative assumptions produce upside because the stock’s current price embeds more risk than the underlying trajectory supports.
Alibaba stock is undervalued at $124 against a TIKR base case that does not require AI monetization to exceed management’s own near-term targets, only to meet them.
Is Alibaba Stock a Buy Right Now?
Alibaba stock trades near $124 while TIKR’s base case targets approximately $210 by March 2031, implying around 69% total return.
With 30 of 40 analysts at Buy or Outperform, Cloud Intelligence Group external revenue accelerating at 40% year-over-year, and the 11th consecutive quarter of triple-digit AI revenue growth behind it, the fundamental trajectory supports the bull case.
The key variable to watch is Cloud EBITDA margin, guided to expand to the teens within one to two quarters.
Should You Invest in Alibaba Group Holding Limited?
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