$BABA Alibaba Epic 2025 Comeback Story

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•  24 Sep 2025
 

•   BABA  
   
  -0.70%

Alibaba Group (BABA) is experiencing its best year since 2017, with the stock nearly doubling in 2025 as the Chinese tech giant reclaims its throne in AI, e-commerce, and cloud computing.

$BABA closed above $163 Tuesday, marking levels not seen since the dark days of 2021. The stock has achieved an impressive eight consecutive weeks of gains, the longest streak since early 2020. Just in the past month alone, BABA has surged over 33%.

This remarkable recovery comes after a brutal journey that saw BABA plummet from its $300+ peak in late 2020 to devastating lows between $70-120 for extended periods since 2022.

The latest 9% surge in BABA came following major announcements that position Alibaba as a serious global AI competitor. The company unveiled Qwen3-Max, its new flagship language model with over 1 trillion parameters, while announcing expanded data center investments outside China and a strategic partnership with NVIDIA for physical AI applications including robotics and autonomous vehicles.

Perhaps most surprising is founder Jack Ma unofficial return to leadership at Alibaba. After disappearing from public view during China's 2020 tech crackdown, Ma's comeback symbolizes renewed government support for Chinese tech companies. "Reports of Jack Ma taking an unofficial leadership role should be viewed more as a sentimental factor than a clear fundamental driver," notes Bo Pei from U.S. Tiger Securities. "His presence can help restore confidence among employees and investors as BABA navigates reorganization and increased competition."

Beyond AI developments, BABA is executing a solid e-commerce turnaround with plans to reduce loss-per-order by 50% by October through improved operational efficiency and reduced marketing expenses. The company has made heavy investments in delivery capabilities and retail brand repositioning.

Institutional investors see major potential in growing demand from education and healthcare sectors, plus companies leveraging Alibaba's open AI training models. Morningstar analyst Chelsea Tam points to undervaluation, stating "we believe the stocks are priced low because the market still doesn't fully reflect the potential of Alibaba AI cloud." Morningstar gives a $179 price target, significantly above consensus.

All 50+ analysts covering BABA give either "Buy" or "Hold" ratings with zero sell recommendations. This rare unanimous consensus reflects strong institutional confidence, with an average price target just under $167. However, today surge above $179 puts BABA above current analyst consensus, though this could change quickly as brokerages reassess targets following the AI announcements and Ma return.

Despite bullish momentum, BABA faces ongoing challenges including regulatory uncertainty from Chinese authorities, US disclosure requirements for Chinese companies, and potential anti-monopoly regulations. The company remains exposed to data sensitivity restrictions from Beijing.

At current levels, BABA trades at 18.3 times forward earnings, reasonable for a high-growth company and significantly below the 31x average for S&P 500 information technology stocks. The combination of reasonable valuation, strong technical momentum, strategic AI positioning, founder's return, and unanimous analyst support creates favorable conditions for continued BABA appreciation.

BABA represents a compelling turnaround story for investors seeking exposure to China's tech recovery and the global AI revolution. The company has demonstrated it learned from past crises and is building strong positions in tomorrow key technologies: artificial intelligence, logistics, and cloud computing.

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