Alibaba Stock Analysis 2025: Can This Tech Powerhouse Deliver a Major Comeback?

Introduction

When thinking about the Alibaba stock forecast 2025, many investors wonder whether this Chinese tech and e‑commerce powerhouse can stage a comeback.

Alibaba’s shifting business model from pure retail to AI and cloud is raising hopes that it can rebound strongly. Let’s dive into what’s driving Alibaba’s future, what the risks are, and what analysts are predicting.

A Shift in Focus: From E‑Commerce to Artificial Intelligence

Alibaba is no longer just an e‑commerce giant. It’s making bold moves in artificial intelligence (AI) and cloud computing. In early 2025, Alibaba confirmed a massive investment: over US$52–53 billion in AI and cloud infrastructure over the next three years.

This shift could reshape its core growth engine.

Cloud Business Is Gaining Real Momentum

In mid-2025, Alibaba’s Cloud Intelligence Group reported 26% year-over-year growth.

AI‑related products posted triple-digit revenue growth for multiple consecutive quarters.

Analysts believe that as Alibaba’s AI models (like Qwen) gain adoption, the cloud business will become more profitable higher‑margin AI offerings could boost long-term margins.

These trends suggest that the cloud division may be the company’s strongest future growth driver.

Improving Efficiency and Profitability

Alibaba is trying to get leaner:

According to its FY 2025 report, Alibaba repurchased US$11.9 billion in shares, reducing its share count by about 5.1%.

It also declared US$4.6 billion in combined ordinary and special dividends.

Removing some non‑cash compensation, its adjusted EBITA jumped, showing stronger operational efficiency.

These moves show Alibaba’s commitment to returning cash to shareholders, which could boost investor confidence.

What do the experts say about Alibaba stock in 2025?

MarketBeat reports an average 12-month target of US$190.18, which implies roughly 24% upside.

According to TradingNews, a 2025 price target of US$150–155 is realistic given improving profitability, strong buybacks, and AI tailwinds.

RoboForex analysts project a range between US$135 and US$180 for 2025, based on various scenarios.

Morningstar raised its fair value estimate to US$163 per ADS after lifting its earnings forecasts, citing faster cloud growth and a turnaround in previously loss-making units.

According to TIKR.com, some forecasts suggest limited upside, with an average target around US$165, unless Alibaba significantly outperforms on growth.

What’s Fueling Optimism?

Here are the key drivers that make a bullish Alibaba stock forecast 2025 possible:

AI & Cloud Investments: Massive capex in AI and cloud gives Alibaba the infrastructure to scale.

Operational Efficiency: Share buybacks and improving margins point toward better capital return.

Strong Fundamentals: Continued growth in core e‑commerce (Taobao, Tmall) plus improving profitability in international segments.

Homegrown AI Models: Alibaba’s Qwen 2.5‑Max model is seen as a strategic asset. Morningstar references its strength.

Shareholder Returns: Large dividends and buybacks could make the stock more attractive for income-minded investors.

Not everything is rosy. Key risks could derail the bullish case:

Heavy CapEx Load: Massive spending on cloud and AI could pressure cash flow in the short term. Some investors worry about the ROI.

Macro Slowdown in China: If consumer spending weakens, Alibaba’s e-commerce business could suffer.

Intense Competition: Both cloud and AI are crowded fields; rivals like Tencent, Baidu, and others won’t give away market share easily.

Regulatory Risks: As a major Chinese tech company, Alibaba always faces regulatory uncertainty that could impact growth.

Execution Risk: Turning loss-making units profitable is not guaranteed, especially internationally.

Real‑World Signals: What’s Already Happening

In its Q2 2025 earnings, Alibaba reported 2% YoY revenue growth (on a reported basis), but when adjusted for some disposed businesses (Sun Art, Intime), its like-for-like revenue rose by 10%.

The CFO, Toby Xu, confirmed that AI revenues remain a powerful lever: cloud intelligence revenue is growing fast, and loss-making units are closing in on break-even.

On the product side, Alibaba announced a partnership with Apple to bring its AI to iPhones sold in China — a big signal that its AI strategy may have strong commercial traction.

Balancing the Bull and Bear Cases

Bull Case: If Alibaba executes well on its AI and cloud strategy, and if its cost investments start paying off, the stock could hit or exceed analyst targets in the US$150–190 range. Strong cash returns (buybacks + dividends) strengthen the long-term case.

Bear Case: If Alibaba’s massive capex doesn’t translate into margin expansion, or if macro conditions deteriorate, then growth may stall — which could depress the stock below current levels.

Final Thoughts

To wrap up, the Alibaba stock forecast 2025 is cautiously optimistic. Alibaba’s bold pivot toward AI and cloud could pay rich dividends if the company executes well. On the other hand, the heavy investment burden and external risks (macro, regulatory) remain real.

If you believe in Alibaba’s long-term transformation into a cloud‑AI powerhouse, the potential upside is compelling. But if you’re more risk-averse or worried about China’s macro backdrop, it may be wise to tread carefully.