Alibaba Group’s stock (BABA) has recently reached $149.79, as Wall Street maintains a bullish outlook on the e-commerce giant despite facing some near-term challenges. Analysts project that the stock could climb to over $198 within the next year, reflecting renewed confidence in Alibaba’s strategies surrounding artificial intelligence (AI) and cloud computing growth. As the company navigates through the transformations that 2025 brings, investors are keenly observing its transition from regulatory difficulties to new growth avenues.
The current market dynamics show a significant uptick in analyst optimism, with 20 out of 23 analysts recommending a “Strong Buy” for Alibaba shares. The average price target stands at $198, which indicates a potential upside of 32.2% from the current price. Research from Simply Wall Street also corroborates these figures, raising their fair value estimate to approximately $198 per share, driven by expectations of robust cloud and AI growth.
Alibaba’s cloud division has emerged as the fastest-growing segment of the business, achieving impressive 34% year-over-year revenue growth in the third quarter of 2025, largely spurred by AI applications and increased enterprise adoption. This development marks a critical turning point for the cloud segment, which previously faced scrutiny regarding its maturity. In addition, AI-related products have reported continuous triple-digit growth for seven consecutive quarters, highlighting the sustained momentum behind this strategic initiative.
Despite challenges in the broader economic landscape in China, analysts remain optimistic about Alibaba’s long-term trajectory. The company’s stock has returned an impressive 76% year-to-date, reflecting a recognition of the company’s renewal phase after years of regulatory headwinds. Recent financial results have shown some solid growth metrics as well—with a 6% increase in total revenue to RMB 996.3 billion ($137.3 billion) for the fiscal year 2025, complemented by a 12% rise in core e-commerce revenue.
Valuation metrics indicate there is room for significant appreciation, even though BABA stock is trading nearly 43.9% below the fair value estimated by analysts. The current P/E ratio of 18.8x is viewed as modest for a mega-cap tech firm exhibiting double-digit earnings growth. Possible appreciation factors include cloud revenue growth, advancements in AI monetization, and increasing market share in quick commerce in China.
Looking ahead, factors such as an acceleration in cloud revenue, breakthroughs in AI monetization, and advancements in quick commerce could drive BABA stock above the $198 mark in the coming year. The ongoing management focus on margin expansion while sustaining growth investment is essential to achieving analyst goals. If Alibaba continues to deliver on expectations for cloud and AI investment returns while protecting its core profitability, institutional investors might propel the stock closer to Wall Street’s targets over the next 12 months.