Everyone is looking for the "Amazon of China" to finally wake up. Honestly, if you’ve been holding BABA shares over the last three years, you're probably exhausted. You've watched the ant group IPO collapse, lived through the "common prosperity" crackdowns, and seen the stock get sawed in half while US tech went to the moon. It’s brutal. But predicting where this thing goes next isn't just about reading a chart; it's about understanding a geopolitical chess match that most Western traders simply ignore.
The alibaba stock price prediction for the next couple of years hinges on two things: domestic consumption in a post-pandemic China and whether the CCP actually wants its tech giants to be profitable again.
The Cloud Growth Engine is Sputtering (But Maybe Not for Long)
Cloud computing was supposed to be the savior. For a while, Alibaba Cloud was growing at 50% or 60% year-over-year, and everyone thought it would follow the AWS trajectory to infinite margins. That hasn't happened. Growth slowed to single digits recently. Why? Because state-owned enterprises in China started moving their data to "state clouds" run by telecom giants like China Telecom. It’s a trust issue. Or rather, a control issue.
But here is the twist. AI is changing the math. Alibaba’s "Tongyi Qianwen" LLM is actually pretty competitive. If they can integrate AI across their massive ecosystem—from Taobao to Cainiao logistics—the efficiency gains could be massive. We aren't just talking about chatbots. We are talking about automated supply chains that predict what a shopper in Shanghai wants before they even open the app.
Jack Ma’s Shadow and the New Management
Let’s talk about Eddie Wu and Joseph Tsai. Taking over from Daniel Zhang wasn't just a reshuffle; it was a pivot back to the "user-first" mentality that made Alibaba huge in the first place. They are leaning into the "non-core" asset divestitures. They want to be lean. They’re buying back shares like crazy—billions of dollars worth—which is basically management screaming at the market that the stock is too cheap.
Is it working? Well, the market is stubborn.
The valuation is objectively low. When you look at the price-to-earnings ratio, BABA often trades at a multiple lower than some "old economy" US utility companies. That is wild for a company that still dominates e-commerce in the world's second-largest economy. But the "China Discount" is real. Investors are terrified of delisting risks and the "variable interest entity" (VIE) structure. If you buy BABA, you don't actually own the company in Hangzhou; you own a shell company in the Caymans. That makes people nervous.
Predicting the Numbers: What Do the Big Banks Say?
Predictions are all over the place. Morgan Stanley and Goldman Sachs have been cautiously optimistic, often setting price targets in the $100 to $120 range, but they keep moving the goalposts. Why? Because the macro data out of China is "kinda" messy. Youth unemployment is high. The property market is a disaster zone. When people feel like their apartment—which is 70% of their wealth—is losing value, they don't go on a shopping spree on Tmall.
Still, Alibaba’s international wing, AIDC (Alibaba International Digital Commerce), is a bright spot. AliExpress and Lazada are fighting tooth and nail against Temu and Shein. It's a bloodbath of subsidies right now. If Alibaba can win the logistics war through Cainiao, they can maintain margins that PDD (Pinduoduo) can't touch.
- The Bull Case: China’s stimulus finally hits the consumer’s pocket. BABA hits $130 as the "valuation gap" closes.
- The Bear Case: More regulatory surprises or a worsening "Cold War" with the US sends the stock back to the $60s.
- The Most Likely Scenario: A slow, grinding recovery toward the $95-$105 range as the company proves it can grow earnings even in a stagnant economy.
The Geopolitical Elephant in the Room
You can't do an alibaba stock price prediction without mentioning the US-China chip war. Alibaba needs H100s and B200s from Nvidia to run their cloud at peak performance. Washington says no. So now, Alibaba has to rely on domestic chips from Huawei or their own T-Head semiconductor unit. If they can't get the compute power, their AI ambitions are capped.
But wait. There’s a silver lining. Because the stock has been so hated for so long, most of the "weak hands" are already out. The people left holding BABA are either true believers or institutional players who are waiting for the Hong Kong dual-primary listing to bring in massive inflows from mainland Chinese investors via the "Southbound Stock Connect." That is a huge catalyst that people don't talk about enough. When mainland "mom and pop" investors can finally buy BABA easily, the liquidity could drive a massive spike.
Why the "Dead Money" Narrative Might Be Wrong
People call BABA "dead money." I get it. It’s been a painful ride. But look at the free cash flow. This company is a cash-generating machine. They have tens of billions in net cash on the balance sheet. They could literally buy back a double-digit percentage of the entire company every few years at these prices.
Eventually, the math has to matter.
The technicals are showing a long-term bottoming pattern. We’ve seen a series of "higher lows" on the monthly charts. It’s subtle. It’s boring. But boring is often where the money is made. The hype is in AI and weight-loss drugs right now. Nobody wants to talk about Chinese e-commerce. And historically, that’s exactly when the best entry points appear.
What You Should Actually Watch
Forget the headlines about Jack Ma's latest hobby. Watch the Adjusted EBITA for the Core Commerce segment. If that stays stable while they cut losses in "Local Services" (like Ele.me) and "Digital Media," the bottom line is going to explode. They are finally stopping the bleeding in their side projects. They are acting like a mature company instead of a frantic startup.
Actionable Steps for Navigating Alibaba Stock
If you're looking at Alibaba as a short-term trade, you're probably going to get chopped up by the volatility of the Hang Seng index. It's a casino in the short term. However, for a long-term horizon, there are specific things to do.
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- Check the Southbound Connect: Monitor the news for when Alibaba officially transitions to a dual-primary listing in Hong Kong. This is the single biggest technical catalyst for 2024-2025.
- Watch the Yuan: A stronger Renminbi usually correlates with higher BABA prices for US-based ADR holders. If the dollar weakens, your BABA shares get a "hidden" boost.
- Monitor the Competition: Keep a close eye on PDD Holdings' earnings. If Pinduoduo starts losing momentum, it means Alibaba’s "price-matching" strategy is working.
- Scale In: Don't go "all in" on one Tuesday morning. This is a "nibble over time" stock. The volatility is a feature, not a bug.
The reality is that Alibaba is no longer a "growth at all costs" company. It’s a value play with a massive "tech option" attached to it. If the AI cloud takes off, the stock is mispriced by 100%. If it doesn't, you're still buying a dominant market leader at a bargain-bin valuation. Just don't expect it to happen overnight. The path to $120 or $150 is paved with boring quarterly reports and incremental gains in consumer confidence.
Next Steps for Investors:
Review your portfolio's total exposure to China. Most experts suggest keeping China exposure below 5-10% of a total portfolio due to the unique regulatory risks. Once you've set your "risk ceiling," look at the current 200-day moving average for BABA. If the stock is trading significantly below its cash-per-share value plus the value of its stake in Ant Group, the margin of safety is likely high enough for a long-term position. Keep an eye on the quarterly 13F filings to see if big players like Michael Burry or David Tepper are increasing their stakes, as they have been the most vocal "China bulls" in recent cycles.