Earnings Preview: Alibaba (BABA) likely to report higher Q4 sales, profit

Alibaba Group Holding Limited (NYSE: BABA) will report its fourth-quarter results next week, amid expectations for a year-over-year increase in revenue and net profit. As the company continues to grow its e-commerce business, it is also strategically positioning itself to seize opportunities in the AI boom.

Estimates

The China-based e-commerce behemoth is expected to publish its fourth-quarter 2025 results on Thursday, May 15, at 5:35 am ET. Market watchers predict adjusted earnings of $12.81 per ADS on revenues of $240 billion for the quarter. For Q4 2024, the company reported earnings of $10.14 per ADS and revenues of $221.87 billion.  

In recent months, the performance of Alibaba’s stock significantly improved, recovering from a prolonged downturn. The value has grown by 60% in the past year, although the last closing price is well below the stock’s all-time highs. 2024 proved to be a promising year for Alibaba, with improved financial performance driving investor confidence. The company’s strong business momentum and attractive valuation present a compelling investing opportunity.

Stable Demand

In the third quarter of 2025, Alibaba generated $38.38 billion in revenues, which is up 8% year-over-year. Revenue grew across key operating segments and that translated into a 13% increase in adjusted earnings to $2.93 per ADS. Net income attributable to ordinary shareholders more than doubled from last year to $6.70 billion or $2.79 per ADS in Q3.

“With the rapid adoption of AI technology across industries, customer demand for Alibaba Cloud products has surged. Looking ahead, the revenue growth of Cloud Intelligence Group will continue to accelerate. We recently launched Qwen 2.5-Max, our flagship AI foundation model, which has achieved industry-leading performance across multiple recognized benchmarks. As of the end of January, over 90,000, Qwen-based derivative models have been developed globally, making Qwen the most popular among developers across the major model families,” Alibaba’s CEO Eddie Wu said at the Q3 earnings call.

New Model

Alibaba has revised its business model to better align with the changing market environment, with a focus on offering competitive prices and using AI technology to enhance customer experience. Recent performance shows that the company’s strategy of prioritizing customer experience over the merchant-centered approach is yielding the desired results. Meanwhile, its e-commerce and cloud business may face pressure from the new import tariffs imposed by the US government, triggering a trade war with China.

Shares of Alibaba closed Friday’s trading up 2%, maintaining the recent momentum ahead of the earnings. The stock’s average price over the past 52 weeks is $96.63.