Alibaba is well known as one of the key e-commerce players in the crucial Chinese market — but over the past couple of years, the business has diversified significantly, and is now rightfully considered a veritable tech giant.
Since the start of the year, Alibaba stock (NYSE: BABA) has been on quite a strong upward trajectory.
The company’s Q2 earnings call on November 15 was solid — with a small earnings beat and revenues missing estimates just barely. In the immediate aftermath, the stock entered a consolidation period — and in January, the overnight success of DeepSeek spurred on a flurry of optimism regarding the Chinese tech sector.
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On February 19, BABA stock closed at $124.80, but by press time on February 20, the price of Alibaba shares had increased to $139.48, bringing year-to-date (YTD) returns up to 64.50%.
This latest 11.75% move to the upside was caused by the release of the company’s quarterly report covering Q3 — and once more, AI is the dominant narrative.
Alibaba stock rises on earnings beat, strategic AI moves
Earnings per share came in at $2.93, ahead of consensus estimates which were pegged at $2.67. Revenues came in just slightly above estimates.
As bullish as an earnings beat is, it was not those two metrics that drove the rally. It was optimism surrounding artificial intelligence. AI-related product revenue achieved triple-digit growth for the sixth consecutive quarter, while cloud revenue increased by 13% on a year-over-year (YoY) basis. Although less quantifiable, the release of Alibaba’s Qwen 2.5 AI model was also a bullish catalyst.
Speaking to analysts, Chief executive officer (CEO) Eddie Wu claimed that the company would invest more in AI and cloud computing over the next three years than it had in the entirety of the previous decade — although he did not specify the exact amount.
The e-commerce business recently announced a partnership with Apple, which will see Alibaba’s AI features integrated into iPhones sold in China. In addition, Alibaba is reportedly considering an investment into DeepSeek, which has recently sought out outside funding for the first time.
Another key factor that readers shouldn’t forget is the current Alibaba stock repurchase program. This quarter, the business repurchased roughly $1.3 billion worth of BABA stock — and it has board authorization to repurchase as much as $20.7 billion more by March 2027.
Featured image via Shutterstock
