Chinese e-commerce giant Alibaba Group Holding (NYSE:BABA) may reveal how global issues are impacting the company and how diversification into AI might help future growth when the company reports its first-quarter financial results on Friday before the market opens.
Earnings Estimates: Analysts expect Alibaba to report first-quarter revenue of $34.26 billion, down from $33.47 billion in last year's first quarter, according to data from Benzinga Pro.
The company missed analyst estimates for revenue in the fourth quarter, but has beaten estimates in seven of the last 10 quarters overall.
Analysts expect the company to report first-quarter earnings per share of $1.95, down from $2.26 in last year's first quarter. The company has beaten analyst estimates for earnings in two straight quarters and seven of the previous 10 quarters overall.
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Key Items to Watch: Several analysts have lowered their price targets on Alibaba stock ahead of the earnings release, including Barclays and Bank of America Securities.
The stock, and other Chinese stocks, have also found their way being sold or stakes lowered in investment portfolios of top hedge funds in recent months, including Bridgewater, Appaloosa and Coatue Management.
Once known best for its e-commerce in China, investors and analysts may be excited to hear more about Alibaba's growth in the cloud and AI sectors, two of the fastest-growing areas.
A report stated that Alibaba and Baidu were the leaders in China's public cloud services for artificial intelligence in 2024, each representing around a 25% market share. The company's AI coding model, Qwen 3 coder, has been gaining global traction.
In the fourth quarter, Alibaba's Cloud Intelligence Group was a key performer with revenue up 18% year-over-year. The growth of the segment outperformed that of many of the company's other segments. The company stated that the increased adoption of AI-related products contributed to the segment’s growth.
Another area to watch is Alibaba's growth outside of China, with the company's International Digital Commerce Group posting a year-over-year increase of 22% in the fourth quarter, driven by its cross-border businesses.
With the United States making imports from China more difficult and imposing tariffs on goods from many countries, Alibaba's report could reveal the significant impact the Trump administration is having on its business in the U.S. and how diversification in China and other regions can mitigate any challenges.
BABA Price Action: Alibaba stock is down 1.4% to $120.45 on Thursday, versus a 52-week trading range of $80.06 to $148.43. Alibaba stock is up 41.8% year-to-date in 2025.
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