Alibaba opened 2025 trying to shake off years of geopolitical baggage and inconsistent sentiment. Now in July, the stock is up over 26% year-to-date and trading near $106.27. What was once a deeply discounted China play has quietly pushed its way back into serious consideration. But the recovery, while real on paper, still feels fragile.
First-quarter earnings confirmed real strength under the hood. Revenue hit RMB 236.5 billion, or roughly $32.6 billion, up 7% from a year ago. Operating income surged 93%, and net profit exploded 1203%, helped by tight expense controls and a leaner cost structure following years of aggressive restructuring. Taobao and Tmall delivered 12% growth, showing consumer demand hasn’t collapsed, even in a soft macro backdrop. Meanwhile, cloud services are starting to do the heavy lifting. Revenue there climbed 18%, thanks in part to ongoing AI demand across China’s enterprise sector. That marked the seventh straight quarter of triple-digit AI product growth.
The big story isn’t just the bounce—it’s what Alibaba is betting on. In February, the company committed $52 billion to AI and cloud infrastructure over the next three years. That’s not just bold, it signals full alignment with the global tech arms race, where Alibaba wants to sit next to Microsoft, Amazon, and Nvidia. Markets have noticed. GameStop’s CEO disclosed a 7 million ADR position in Alibaba this spring, valued around $1 billion. That buy drew attention across funds and retail, especially with the stock still trading at a forward P/E below 12.
Despite the upside momentum, not everything has gone Alibaba’s way. Revenue still came in roughly $5 billion under expectations last quarter, and quarter-over-quarter performance dipped 15%. The rally has been met with skepticism, and every headline out of Washington or Beijing still has the power to undo weeks of gains. Tariff chatter and export restrictions remain real threats. Regulatory clarity is improving, but it’s nowhere near solid. Traders know that a single policy shift could reverse sentiment in a heartbeat.
Technically the stock has been moving in a tight range, with resistance forming near $117. If that level gets cleared with volume, the path toward $130 opens up quickly. Analysts still hold a 12-month average target around $154, suggesting the recovery has legs. But on the downside, a drop below $105 could send it toward the $100 round number, and potentially back to the $73.87 zone tagged in late 2023. For now, price action suggests patient accumulation, not full conviction.
Online, Alibaba is trending again. Reddit forums and Twitter threads are filling up with charts, bullish flow, and deep-dive threads on the company’s cloud dominance and AI scale-up. Options volume is rising again, with bulls betting on a Q3 breakout. Bears are still hedging macro risk, but they’re less vocal than earlier this year.
The setup is all there. Profitability has returned. The AI buildout is massive. Institutions are nibbling again. And yet Alibaba still trades like it’s one bad headline away from collapse. That contradiction is what defines the stock today. For long-term bulls, the risk might finally match the reward. But nothing moves in a straight line when the CCP and Washington are two of your biggest variables.
Disclaimer: This is not financial advice