Alibaba Group Holding Limited (NYSE: BABA, HKEX: 9988) is having one of its strangest “good year / bad quarter” moments in recent memory.
As of midday on December 9, 2025, the U.S.-listed ADR trades around $158 per share, down fractionally on the day and sitting between a 52‑week low of about $80 and a high near $193. [1] Hong Kong shares (9988) hover near HK$153, also slightly lower. [2]
Yet behind that calm quote is a very loud story: profits have cratered, AI and instant commerce are exploding, a new AI “everything app” is surging up download charts, and analysts just cut and raised targets for the stock in the same news cycle.
This article pulls together the key news, forecasts and analysis as of December 9, 2025, and then frames what that actually means for BABA over the next 12–36 months.
1. Alibaba stock today: where BABA actually sits
- Price (NYNYSE ADR BABA): about $158.13, down roughly 0.1% intraday. [3]
- Day range (Monday’s session): ~$156.4–$158.7, with around 7 million shares traded. [4]
- 52‑week range: roughly $80.06–$192.67. [5]
- Market cap: around $370–380 billion depending on the source. [6]
From a technical perspective:
- Barchart’s model calls Alibaba a “40% Buy” on its technical opinion scale, noting a weak short‑term outlook but supportive long‑term indicators, with first support near $156–155 and resistance around $159–161. [7]
- StockInvest.us, which focuses on pure price/volume signals, is harsher: BABA is currently labeled a “Sell candidate”, in a wide but falling short‑term trend. Their model expects roughly ‑4.7% downside over the next three months, with a 90% probability the stock stays between $144 and $174. [8]
On the year, BABA has skyrocketed from its post‑crackdown doldrums. Different analysts peg the 2025 gain anywhere from ~50% to close to 90%, depending on the starting point and listing they use. [9] Either way, the stock has clearly staged a major comeback, even if the last few weeks have been choppy.
2. The earnings bombshell behind today’s headlines
All of today’s commentary anchors on one thing: Alibaba’s September quarter 2025 (fiscal Q2 2026) results, released on November 25, 2025.
From the company’s own numbers: [10]
- Revenue: RMB 247.8 billion (~$34.8 billion), +5% YoY.
- Excluding divested retailers Sun Art and Intime, revenue growth would have been +15% YoY.
- Income from operations: plunged from RMB 35.2 billion to 5.4 billion (about ‑85% YoY).
- Non‑GAAP net income: RMB 10.35 billion (~$1.45 billion), ‑72% YoY.
- Free cash flow: swung to a RMB 21.8 billion outflow (~$3.1 billion), versus a RMB 13.7 billion inflow a year ago.
- Cash and liquid investments: a giant RMB 573.9 billion (~$80.6 billion) war chest.
Management is very open about what’s going on: they are deliberately torching near‑term margins to hit the gas on:
- Quick commerce / instant retail (Taobao’s “anything in minutes” push)
- Logistics capacity
- High‑capex AI + cloud infrastructure
Media coverage today keeps circling the same core idea:
- Dao Insights describes the quarter as “trading margins for momentum”, noting an 85% drop in operating profit and steeply negative free cash flow as Alibaba “buys” growth in instant retail and AI infrastructure. [11]
- A Nasdaq/Motley Fool analysis stresses that revenue rose 5% to about RMB 247.8 billion, but non‑GAAP net income fell ~72% and free cash flow went negative as AI data centers and logistics spending ramped. [12]
- Barchart columnist Mohit Oberoi summarizes it even more bluntly: “profits have nosedived” as AI and instant commerce soak up cash, even though top‑line growth and user metrics look strong. [13]
So today’s news isn’t about what Alibaba earned—it’s about what it chose to sacrifice to chase AI and instant delivery.
3. Fresh December 9 headlines: downgrades, risks and new buyers
3.1 Arete downgrade: from Buy to Neutral
This morning, boutique research firm Arete downgraded Alibaba from “Buy” to “Neutral” with a $172 price target—only about 9% upside from the prior close. [14]
Key points from MarketBeat’s summary of the note: [15]
- Arete’s downgrade is partly about valuation after the big run‑up.
- The firm still sees upside to $172, but considers the risk/reward more balanced.
- Even after the downgrade, 18 analysts still rate BABA a Buy, with only 1 Hold and 1 Sell, and an average target near $194.
24/7 Wall St.’s daily analyst‑call roundup highlights the same downgrade, positioning Alibaba as one of today’s notable “downgrade” names in a macro backdrop dominated by Fed‑cut speculation. [16]
3.2 “Top 3 risks” article hits the wires
The Motley Fool / Nasdaq piece titled “The Top 3 Risks Alibaba Investors Should Not Ignore” is one of the most‑shared Alibaba stories today. [17]
The three big risks it highlights:
- Structurally intense e‑commerce competition
- Domestic rivals like Pinduoduo and Douyin keep pricing pressure high and marketing costs elevated.
- Quick commerce’s profitability drag
- The instant‑delivery race is great for users and growth metrics, not so great for short‑term margins.
- Volatile sentiment toward Chinese tech
- Macro worries, geopolitics, and policy shifts mean BABA’s multiple can move for reasons that have nothing to do with its own earnings.
The article essentially says: Alibaba’s growth engines look good, but the path from “great product metrics” to “stable margins” is far from smooth.
3.3 Two notable 13F headlines: AXA and Quantbot add BABA
Also today, MarketBeat flagged two institutional moves: [18]
- AXA S.A. boosted its position in Alibaba by 53.5% in Q2, taking its stake to about 1.1 million shares valued near $125 million at the time of filing.
- Quantbot Technologies LP disclosed a new position of 8,056 shares (~$914,000), a small but symbolically bullish move by a high‑frequency/quant outfit.
Separately (yesterday), another filing showed Kingstone Capital Partners Texas massively increasing its Alibaba stake to ~49 million shares, and Norges Bank initiating a significant new position—both signs that “big money” allocators are willing to lean into the AI + China tech rebound thesis. [19]
3.4 Technical services flag near‑term weakness
StockInvest’s fresh update (December 8, for trading on December 9) calls BABA a “Sell candidate” since December 3, predicting: [20]
- Expected ‑4.7% move over the next 3 months within a falling short‑term trend
- Fair opening price today: $157.76
- Intraday range projection: $155.3–$161.0
This is a nice reminder that most of Wall Street’s “Strong Buy” calls are 12‑month views, while short‑term quant/technical shops can look decidedly more cautious.
4. Deep dive: what the September quarter really tells us
4.1 Revenue: modest headline growth, strong “like‑for‑like”
From Alibaba’s earnings release: [21]
- Reported revenue grew 5% YoY to RMB 247.8b (~$34.8b).
- Adjusting for divested offline retailers, like‑for‑like growth would have been ~15% YoY.
Breakdown highlights:
- China e‑commerce (Taobao/Tmall):
- Customer management revenue grew 10% YoY, helped by better “take rates” and product changes.
- Quick commerce saw rapid growth in monthly active consumers and improving unit economics. [22]
- International digital commerce (AIDC – AliExpress, Lazada, etc.):
- Revenue up 10% YoY to ~RMB 34.8b.
- Adjusted EBITA turned positive (~RMB 162m), thanks to logistics optimization and better efficiency. [23]
- Cloud Intelligence Group:
- Cloud revenue hit RMB 39.8b (~$5.6b), up 34% YoY, with revenue excluding Alibaba‑consolidated subsidiaries up 29%.
- AI‑related product revenue grew triple‑digits yet again—now nine consecutive quarters of triple‑digit AI growth. [24]
So top line is not the problem. The drama is entirely in the profit and cash‑flow lines.
4.2 Profit, margins and free cash flow: the painful part
From the same release, non‑GAAP net income and cash‑flow trends look brutal: [25]
- Non‑GAAP net income:‑72% YoY for the quarter.
- Adjusted EBITA:‑78% YoY to RMB 9.1b.
- Operating margin: collapsed from 15% to 2%.
- Free cash flow:
- Outflow of RMB 21.8b (~$3.1b) vs inflow of RMB 13.7b the prior year.
- Six‑month free cash flow also flipped from +RMB 31.1b to ‑RMB 40.7b.
Management explicitly links this to:
- Heavy investment in quick commerce, user experience, and technology, including AI and cloud infrastructure. [26]
Third‑party analysts largely agree:
- Seeking Alpha notes a 72% YoY drop in earnings, but points out that if you strip out business disposals, revenue would have grown 10–15% YoY, and AI‑related revenue has now delivered six+ quarters of triple‑digit growth. [27]
- Barchart’s Oberoi article highlights a 78% fall in adjusted EBITDA, framing it as a “profit nosedive” driven by the AI & instant commerce land‑grab. [28]
In short: Alibaba is intentionally compressing margins to fortify two bets—AI infrastructure and instant retail.
5. The AI story: Qwen, Aegaeon and the cloud
If you strip away the scary earnings chart, the AI story is why Alibaba’s market cap is back near $400 billion.
5.1 Cloud AI revenue and GPU efficiency breakthrough
On the infrastructure side, Alibaba Cloud continues to look like China’s AI backbone:
- Cloud Intelligence revenue up 34% YoY this quarter, driven by AI workloads. [29]
- AI product revenue has posted triple‑digit growth for at least nine straight quarters, according to the company. [30]
In October, an article on CoinCentral highlighted Aegaeon, a new AI infrastructure system that: [31]
- Cuts Nvidia GPU usage by about 82% for model serving in internal tests (from 1,192 GPUs to 213).
- Allows a single Nvidia H20 GPU to serve up to seven large language models at once.
- Reduces AI model‑switching latency by ~97%, by scaling at the token level and dynamically reallocating GPU resources.
This is more than a nerdy engineering trick; if real‑world performance matches the paper, it could:
- Lower the capital intensity of Alibaba’s AI services.
- Reduce dependence on scarce export‑controlled chips.
- Let Alibaba offer cheaper AI inference in a market where DeepSeek and others are already in a pricing knife fight. [32]
5.2 Qwen: from enterprise model to consumer “everything app”
On the consumer side, Qwen is the star of the show:
- In mid‑November, Alibaba launched the Qwen App, a consumer AI “super‑assistant” built on its latest Qwen3 model. [33]
- The app is free in beta in China (iOS, Android, web, PC), pitching itself as an “everything app” for work and daily life—research, writing, image generation, slide decks, etc. [34]
- The Qwen app quickly jumped into the top five free apps in both mainland China and Hong Kong app stores, and was cited as one of the fastest‑growing AI apps globally in November. [35]
Press and analysts frame Qwen as Alibaba’s attempt to recreate “WeChat‑like” gravity in the AI era, by deeply tying together shopping, payments, maps, entertainment and work tools under a single AI layer. [36]
Meanwhile, AInvest and InsiderMonkey highlight that:
- Alibaba has committed around $50 billion to AI and cloud investment over several years. [37]
- Its Qwen3 models are open‑source and are being positioned as cheaper, capable alternatives to models from OpenAI and Google, especially in multilingual and code‑heavy tasks. [38]
This AI push is precisely why many bulls see Alibaba transforming from a “China e‑commerce stock” into a hybrid of Amazon + Azure, but at a lower multiple. [39]
6. Restructuring and regulation: from 1+6+N to 4 groups
Alibaba is also still digesting its multi‑year restructuring and the end of its big regulatory ordeal.
- After years of antitrust scrutiny and a record RMB 18.2b (~$2.8b) fine, Chinese regulators declared in late 2023 that Alibaba had “achieved good results” in its rectification efforts, formally closing the most punitive phase of oversight. [40]
- In 2023, Alibaba reorganized into the famous “1+6+N” structure (one holding company, six major business groups, numerous smaller units). [41]
- In August 2025, the company simplified again, collapsing those six groups into four larger clusters, a sign that the radical decentralization had gone as far as it needed to. [42]
AInvest’s AI‑generated but human‑edited piece frames this as “regulatory rebound meets strategic reinvention”: [43]
- 2025 full‑year net income grew ~62% YoY to about CN¥129.5 billion, helped by cloud and international commerce.
- The forward P/E around 14x (at that time) was seen as a discount to U.S. peers, reflecting lingering China risk but leaving room for a valuation re‑rating if AI and international segments keep compounding.
So while the latest quarter looks ugly, it’s layered on top of a much stronger 2025 fiscal base and a regulatory backdrop that is—at least relative to 2021–2022—far less hostile.
7. What Wall Street and models are forecasting now
7.1 Sell‑side analyst targets
Across the big brokerages and aggregators, BABA screens as broadly bullish with some new caution:
- MarketBeat forecast page:
- Average 12‑month target:$194
- High: $230
- Low: $162
- Implied upside: ~23% from ~$158. [44]
- StockAnalysis.com:
- 13 analysts: consensus “Strong Buy”.
- Average target:$189.08, implying about 19.6% upside.
- Range: $135–$230. [45]
- MarketBeat / 13F coverage (Dec 9):
- 18 Buys, 1 Hold, 1 Sell.
- Consensus rating: “Moderate Buy”.
- Consensus target in the $194–195 band. [46]
Notable individual calls referenced across today’s pieces: [47]
- Nomura: Buy, target $215.
- CLSA: Outperform, target $200.
- Benchmark: Buy, $195.
- Barclays: Overweight, around $195.
- Bank of America: Buy, $195.
- Citi (from prior coverage): Buy, with a target up in the low‑to‑mid $200s.
- J.P. Morgan: Overweight; target recently trimmed from $245 to $240 after first hiking it from $170 to $245 in October. [48]
- Arete (today): Neutral, $172. [49]
In other words: one new downgrade, but the wall of “Buy” ratings and triple‑digit price targets still stands.
7.2 Quant and technical forecasts
- StockInvest.us:
- Classifies BABA as a Sell in the short term.
- Expects ‑4.7% drift over three months within a falling trend, with 90% confidence band $144–$174.
- Predicts today’s fair opening price at $157.76, and typical daily swings of about ±3.7%. [50]
- Barchart:
- Technical opinion: 40% Buy, acknowledging short‑term weakness but a supportive long‑term trend.
- Notes a 3‑month change of roughly +12% and a 52‑week range of $80.06–$192.67. [51]
So if you blend the two:
- Fundamental / 12‑month Street view: “Moderate/Strong Buy, ~20–25% upside.”
- Trading‑desk / short‑term quant view: “Trend still down in the near term; expect volatility around current levels.”
8. Bull vs. bear case in December 2025
8.1 The bull case
Recent bull‑ish pieces (InsiderMonkey, MarketBeat, Barchart, AInvest, and others) keep returning to a similar set of arguments: [52]
- China is still hyper‑online.
- Over 1.1 billion internet users and online penetration of retail far above U.S. and EU levels give Alibaba a structurally larger digital playground than most Western peers.
- Cloud and AI are inflecting.
- Cloud revenue up 34% this quarter, AI product revenue growing at triple‑digit rates for many quarters.
- Aegaeon and Qwen point to technical leadership in AI efficiency and consumer integration, not just follower status.
- Capital returns are real.
- Alibaba has paid out billions in cash dividends and repurchased roughly $11–22 billion in stock over recent years, including 17 million ordinary shares (~2m ADSs) repurchased for $253m in the September quarter alone, with $19.1 billion still authorized through March 2027. [53]
- Valuation still looks discounted vs global peers.
- Depending on which metric you use, articles peg BABA’s P/E in the mid‑teens to low‑20s, cheaper than many AI or cloud peers despite similar growth drivers. [54]
- Big‑name investors voting with real money.
The classic bull framing: “You’re getting an Amazon‑plus‑Azure hybrid focused on China and emerging markets, at a valuation that still assumes permanent political and structural doom.”
8.2 The bear (or cautious) case
The more cautious takes—which are conspicuously prominent today—focus on three clusters of risk: [57]
- Profitability and cash‑flow risk
- Earnings down 72%, adjusted EBITDA down 78%, free cash flow strongly negative—these are very real numbers, not accounting quirks.
- If AI capex and quick‑commerce subsidies stay this high longer than expected, margin recovery could be delayed well into the back half of this decade.
- Competitive pressure at home
- E‑commerce rivals (Pinduoduo, Douyin) and emerging AI platforms are forcing price wars in both cloud and consumer AI.
- DeepSeek’s aggressive pricing and Tencent’s ecosystem strength mean Qwen has to fight to avoid becoming “just another app.”
- Policy and geopolitical overhang
- U.S. export controls on high‑end chips, combined with China’s efforts to limit dependence on Nvidia, create uncertainty about long‑term AI hardware access.
- Prior episodes—like the February sell‑off after a Trump executive order rekindled China trade fears—show how quickly political headlines can erase tens of billions in Alibaba’s market cap, regardless of fundamentals. [58]
- Sentiment toward Chinese tech remains fragile
- Even after regulatory thaw, many global investors still treat Chinese tech stocks as “uninvestable” or strictly tactical trades.
- Any renewed crackdown, data‑security rule change, or delisting chatter could compress the multiple again.
9. So what does December 9, 2025 really add to the Alibaba story?
Putting today’s news together, the net new information from December 9 is:
- Short‑term sentiment cooled a bit
- Arete’s downgrade to Neutral and the widely shared “Top 3 risks” article highlight a legitimate concern: you now have to pay a higher multiple for a company whose near‑term earnings are falling, not rising. [59]
- Institutional interest remains alive and well
- AXA, Quantbot, Kingstone, Norges Bank and others adding or enlarging stakes is not a guarantee of anything—but it is a real‑money vote that the AI + cloud + international thesis is more than marketing copy. [60]
- AI narrative keeps strengthening while the P&L looks worse
- Qwen is getting strong early traction as a consumer AI app.
- Aegaeon and Qwen3 position Alibaba as a serious AI infrastructure player.
- Yet each of these wins shows up as higher capex and lower margins today. [61]
- Models disagree about the near term, but roughly agree on the range
- Short‑term quants expect the stock to chop around within roughly $145–$175 over the coming months.
- Fundamental analysts see fair value more in the high $180s to low $200s on a 12‑month view, assuming profitability normalizes. [62]
If you zoom out, December 9 doesn’t rewrite the Alibaba story; it sharpens the trade‑off:
Alibaba today is basically a levered bet that “AI + cloud + instant commerce” will, over a few years, more than pay back the current profit sacrifice—in a country with opaque politics and intense competition.
10. Final thoughts (and a boring but necessary disclaimer)
Alibaba in December 2025 is not the sleepy cash‑machine many investors wanted after the crackdown. It’s behaving more like an aggressive growth company again, willingly blowing up margins to grab share in AI and on‑demand retail, while simultaneously returning billions through buybacks and dividends.
- If you believe its AI stack (Qwen, Aegaeon, cloud) and international expansion will win, then today’s mix of Arete downgrades, risk articles, and profit‑slump headlines might look like normal noise in a multi‑year uptrend.
- If you’re skeptical of China’s policy environment or doubt that quick commerce and consumer AI can ever be super‑profitable, these same headlines may look like early warning flares rather than opportunities.
Either way, the new information from December 9, 2025 makes one thing clearer: Alibaba has chosen the “invest hard now, explain the margins later” path. Whether that path rewards shareholders depends on how well its AI and cloud bets convert from impressive demos into durable, high‑margin cash flows.
References
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