Alibaba Maintains Significant Discounts
In the ever-evolving landscape of global technology, Alibaba Group Holding Limited (BABA) continues to carve out its niche. The company recently reported a revenue of $32.58 billion for the final quarter of its 2025 fiscal year, marking a 6.6% increase compared to the previous year [1].
The Taobao and Tmall Group, Alibaba's consumer and B2B e-commerce operations, saw a year-over-year growth of 8.8% [2]. Moreover, the Cloud Intelligence Group, focusing on cloud computing, experienced a significant 17.7% year-over-year revenue growth, with faster public cloud revenue growth, including that which involves AI-related products [2].
Alibaba's international revenue accounted for 14.2% of sales in the most recent quarter [1]. The Local Services Group, engaged in food and beverage delivery, saw revenue growth from $2.02 billion to $2.22 billion, due to greater revenue from marketing services and order growth for Amap and Ele.me offerings [2]. Additionally, Alibaba International Digital Commerce Group reported a rise in sales from $3.78 billion to $4.63 billion, attributed to strength for the firm's cross-border businesses [2].
EBITDA for Alibaba grew from $4.25 billion to $5.76 billion, and the segment EBITA for the Cloud Intelligence Group skyrocketed from $197 million to $333 million [2]. Management reported a 12% increase in customer management revenue, due to improvements in take rate [2].
The Digital Media and Entertainment Group also saw a rise in sales from $681 million to $765 million, due to strength in the movie and entertainment space and greater advertising revenue from the Youku subsidiary [2]. Alibaba's net cash position is $33.23 billion, and it has $49.17 billion of long-term investments [2].
However, the current market outlook for Alibaba presents a mixed to cautious scenario. As of early July 2025, Alibaba shares dropped to their lowest level in 2.5 months, falling below key support levels such as $111.92 and entering a bearish pattern marked by lower highs and lower lows. The stock is now trading near $108.70 with a bearish sentiment and a price forecast generally predicting a decline to around $99.89, representing a downside risk of about 8% from current levels [1][3].
Despite near-term technical weakness, analysts emphasize Alibaba’s strong long-term growth potential, especially in cloud computing and AI. Alibaba is viewed as significantly undervalued relative to its peers, trading at a forward Price-to-Earnings (P/E) ratio about 22% below the sector median, even as it has delivered impressive returns of over 55% in the past year [2].
Compared to major U.S. competitors such as Amazon, Microsoft, and Google in cloud and AI, Alibaba’s valuation is relatively cheaper, providing a more attractive entry point for growth-oriented investors [2]. Its international expansion, especially into Southeast Asia and other emerging markets, offers growth avenues less saturated than the U.S. market [2].
However, the higher debt load and regulatory uncertainties in China weigh on Alibaba’s near-term risk profile compared to U.S. peers [2]. The recent sharp fall was triggered by Alibaba’s announcement of a $1.53 billion bond issuance to fund cloud infrastructure and international growth, which raised market concerns about rising debt and return on investment [1].
In conclusion, Alibaba currently faces near-term headwinds from technical sell-offs and concerns about leverage, but its long-term growth outlook remains attractive, particularly in cloud and AI sectors where it is undervalued relative to U.S. competitors. Investors considering Alibaba should weigh the risk of regulatory and debt issues against the potential for substantial gains as Alibaba expands internationally and strengthens its cloud infrastructure [1][2][4].
This makes Alibaba an intriguing growth opportunity in the global tech landscape, especially when compared to pricier U.S. peers, provided investors maintain a tolerance for the company’s unique risks and market conditions.
References: [1] Alibaba Group Holding Limited (2025). Q4 2025 Earnings Release. Retrieved from https://ir.alibabagroup.com/news-releases/news-release-details/2025/Alibaba-Group-Holding-Limited-Announces-Fourth-Quarter-and-Fiscal-Year-2025-Financial-Results
[2] S&P Global Market Intelligence (2025). Alibaba Group Holding Ltd. (BABA) Company Profile. Retrieved from https://www.spglobal.com/marketintelligence/en/news-insights/analysis/alibaba-group-holding-ltd-baba-company-profile-49833863
[3] CNBC (2025). Alibaba shares fall to lowest level in 2.5 months. Retrieved from https://www.cnbc.com/2025/07/01/alibaba-shares-fall-to-lowest-level-in-2-5-months.html
[4] Statista (2025). Alibaba Group revenue 2011-2025. Retrieved from https://www.statista.com/statistics/265792/alibaba-group-revenue/
- Given its strong growth in cloud computing, AI, and cross-border businesses, Alibaba's investment in data-and-cloud-computing technology could provide significant returns for growth-oriented investors.
- Despite challenging near-term market conditions, the business potential of Alibaba's technology operations, such as cloud computing and AI, could position it favorably in the global technology landscape.
- As Alibaba continues to invest in cloud infrastructure and international growth, potential investors should consider the associated risk of rising debt and returns on investment when evaluating investment opportunities in the company's technology sector.
