Alibaba (BABA) stock has gained significantly in value, climbing nearly 34.3% year-to-date. This surge reflects growing investor confidence as the Chinese tech giant continues to show strength across its core business lines, particularly in e-commerce and its artificial intelligence (AI)-driven cloud segment.

Beyond strong top-line growth, Alibaba is also making strategic moves to streamline its operations. The company is shedding non-core assets, a shift aimed at sharpening its focus on areas with the highest growth potential. This effort to optimize its business portfolio and emphasis on improving operational efficiency and driving sustainable earnings growth are essential to drive long-term growth.

Given these positive developments, analysts remain optimistic about Alibaba’s future. The company’s strong financials and continued growth in its high-potential segments will support further upside in its stock. The highest price target for BABA stock is $180, reflecting 59.3% upside from current price levels.

Alibaba Cloud to Deliver Solid AI-Driven Growth

Alibaba’s cloud business is shaping up to be one of the company’s most promising growth engines, especially as it integrates AI into its offerings. In the most recent quarter ending in March, Alibaba Cloud posted an 18% revenue increase, signaling renewed momentum fueled by faster public cloud adoption. Further, its AI-related product revenue surged at a triple-digit pace for the seventh quarter in a row.

Alibaba is capitalizing on a broadening range of AI applications across various industries. From tech firms to more traditional sectors, such as livestock farming and manufacturing, businesses are increasingly integrating Alibaba's AI products into their operations. This growing industry penetration reflects the scalability of Alibaba’s technology, positioning it as a leader in the cloud computing and AI space.

Looking ahead, Alibaba is ramping up investments in AI infrastructure and advanced technologies, which will strengthen its leadership in this fast-growing segment and support long-term growth.

Alibaba’s cloud business ended fiscal year 2025 with double-digit revenue growth, and management expects AI to drive its future gains. The shift in AI applications from back-end enterprise systems to more customer-facing solutions will provide significant growth opportunities ahead. At the same time, adoption is spreading beyond large corporations to include a growing base of small and medium-sized enterprises, unlocking even more market potential.

Despite some uncertainty in the global AI supply chain, demand for cloud and AI solutions remains resilient and strong. Alibaba is exploring diversified solutions to meet this rising demand while advancing foundational research. In April, it released the next-generation Qwen3 model as open source. This model gives Alibaba a technological edge over its peers and strengthens its competitive position.

Overall, Alibaba’s cloud business appears well-positioned to deliver strong growth led by solid customer demand, expanding market reach, and ongoing investment in AI infrastructure.

Momentum to Sustain in BABA's Internet Business

The momentum in Alibaba’s e-commerce and internet platform businesses will likely sustain. Continued investments in attracting new users and enhancing the customer experience are already yielding results. The company’s flagship platforms, Taobao and Tmall, are experiencing strong momentum in user acquisition, indicating the strength of its domestic e-commerce operations.

Beyond China, Alibaba’s international business is also gaining traction. The company’s cross-border arm, Alibaba International Digital Commerce (AIDC), posted a robust 22% year-over-year revenue increase in the most recent quarter. This surge reflects rising demand and Alibaba’s strategic expansion into new markets.

Even as global trade policies present potential headwinds, Alibaba’s diversified international presence positions it well to navigate changing regulations and economic landscapes. Moreover, the segment is likely to achieve profitability soon, which is a positive development.

The Bottom Line for Alibaba Stock

With a renewed focus on high-growth sectors such as cloud and AI, strong financials, and a growing user base, analysts see significant upside in Alibaba stock. While macroeconomic and regulatory challenges remain, Alibaba’s diversified businesses, investments in AI infrastructure, and improving efficiency position it well to deliver solid growth.

Wall Street is optimistic. Analysts currently rate Alibaba stock a “Strong Buy.” Further, with a forward price-earnings multiple of 11,8x, Alibaba trades at a discount relative to its growth potential. Analysts are forecasting nearly 19.5% growth for the company’s bottom line in fiscal year 2026, which makes BABA stock too cheap to ignore.