Alibaba Stock Soars 50% as Cloud and AI Drive Growth
Alibaba, under CEO Eddie Wu's guidance, is restructuring its business, selling low-margin ventures and investing heavily in Taobao Instant Commerce and international expansion. The company's recent financial performance and strategic moves have boosted its stock price, which has gained over 50% since August 2022 and is now at 2021 high levels.
Alibaba's cloud division has been a significant driver of growth, with a 26% increase in the last quarter. AI-related revenues have been surging, growing at triple-digit rates for the eighth consecutive quarter. In Q1 2025/26, Alibaba's total revenue reached $34.57 billion, with core e-commerce up 10% and iCloud Intelligence up 26%.
The company's strong performance has been recognized by analysts. Morningstar has raised its fair value estimate for Alibaba's US ADRs by 49% to $267, citing its robust cloud position and improved chip performance. Morgan Stanley projects the iCloud division's growth at 32% in 2026 and 40% in 2027, driven by AI investments and strategic partnerships.
Alibaba's strategic realignment, led by Eddie Wu, is paying off. The company's iCloud division and AI offensive are driving growth, with the stock reaching 2021 high levels. Despite temporary declines due to broader economic concerns and regulatory issues, Alibaba's international business is growing strongly and nearing profitability. With positive sentiment towards China and strategic investments in AI and iCloud, Alibaba's future looks promising.
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