Alibaba (BABA), the Chinese e-commerce and cloud company, is set to release its Q1 FY27 results on August 20, before the market opens. Wall Street expects the company to report earnings per share of $1.49 compared to $2.19 in the prior-year quarter. Revenues are expected to rise 16% to $39.8 billion.
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BABA stock has declined 16% year to date as the company increases spending on AI and e-commerce subsidies. These investments continue to weigh on profit margins. Investors will focus on the Cloud Intelligence Group to see whether stronger AI agent demand and data center expansion can drive higher-margin recurring revenue.
Options Market Sees a 6.6% Move
Based on TipRanks’ options pricing tool, traders expect Alibaba stock to move about 6.6% in either direction following the Q1 earnings announcement.
This implied move is lower than Alibaba’s historical post-earnings average of roughly 7.6% over the last eight quarters.
Analysts’ Take on Alibaba Ahead of Earnings
Barclays analyst Jiong Shao sees room for Alibaba to beat expectations when it reports earnings on August 20. He pointed to faster Cloud growth and AI annual recurring revenue above targets. Shao also expects quick-commerce losses to fall faster and core e-commerce profitability to stabilize.
Likewise, Morgan Stanley analyst Gary Yu reiterated an Overweight rating on Alibaba stock while lowering his price target to $180 from $190. The analyst expects Alibaba Cloud revenue to grow 45% year over year, ahead of market expectations, with cloud margins improving to about 11%. He believes AI-related cloud demand remains strong and expects cloud growth to continue speeding up in the coming quarters.
At the same time, Yu expects China e-commerce results to remain under pressure due to soft consumer demand. However, he expects losses from Alibaba’s quick-commerce business to narrow, helping offset weaker results from its China e-commerce business. Despite trimming his price target, Yu continues to view Alibaba as one of his “top picks” because of its attractive valuation and improving cloud business.
Is BABA Stock a Good Buy?
Wall Street remains constructive on the stock. Alibaba carries a Strong Buy consensus rating based on 12 Buy ratings over the past three months. The average BABA price target stands at $190.76, suggesting roughly 56% upside from current levels.
