Alibaba stock rebound is elusive, but a comeback is coming in 2025

Alibaba stock price remains under pressure as concerns about its growth trajectory continues. BABA surged to $117 in October as Beijing unveiled stimulus measures and then erased those gains to $85. So, will the BABA share price resume its rebound in 2025?

No longer a growth story as headwinds remain

Alibaba was compared to Amazon for a long time since their businesses were almost identical. They are both big players in the e-commerce industry, while their expansion to offering cloud computing solutions has paid up.

However, the two companies have diverged. Amazon is the fifth-biggest after Apple, NVIDIA, Microsoft, and Alphabet. It has a market cap of over $2.4 trillion.

Conversely, Alibaba has crashed by 72% from its all-time high, moving from the biggest company in China to eighth. Large Chinese companies like Tencent, ICBC, Kweichow Moutai, and the Agricultural Bank of China have overtaken it.

This divergence is mostly because of Chinese policies on technology companies and its slowing momentum. China ended a review of its operations in 2024, and pushed it to change some of what it views as uncompetitive practices. 

Alibaba’s annual results shows that its annual revenue has risen from $71.9 billion in the financial year to March 2020 to $130 billion in the last financial year. While that was a good performance, Amazon’s revenue soared from $280 billion to $578 billion in the same period.

Other Chinese companies have done well in the same period. JD.com’s revenue soared from $82 billion to $152 billion, helped by its Temu brand. 

Analysts expect that Alibaba’s growth will remain muted in the next few years because of the upcoming Donald Trump’s trade war and the deteriorating Chinese economy. Most economists have downgraded China’s annual economic growth forecast as retail sales remain weak.

Cloud computing woes

Amazon’s stock price has surged mainly because its reliable cloud computing business has offset the slowing or volatile sector. 

Alibaba Cloud’s business has not achieved the same scale. Analysts estimate that it has a 4% market share after AWS, Azure, and Google Cloud.

The main reason for this is that Alibaba has not gained market share in other countries, where American companies dominate. 

The most recent results showed that Alibaba’s cloud revenue rose by 7% to over RMB 29 billion, while Microsoft and Amazon had a double-digit growth rate.

Taobao and Tmall Group’s revenue rose by just 1 %, while Alibaba International Digital Commerce rose by 29%. While this growth was impressive, the division had a negative adjusted EBITDA loss of over RMB 2.9 billion.

Analysts expect that Alibaba’s business will continue experiencing a single-digit growth rate. For the year, the revenue growth will be 6.24% followed by 8.50% in the next financial year.

Alibaba’s management has worked hard to boost its stock price. For example, it has spent billions repurchasing its stock, reducing its outstanding shares from over 2.6 billion in 2021 to 2.32 billion today. These buybacks have helped to boost its earnings per share by reducing the number of outstanding shares.

Alibaba stock price analysis

BABA stock chart by TradingView

The weekly chart shows that the BABA stock price has consolidated in the past two years. It has remained between the key support at $56.60 and the resistance at $120. The upper side was notable because it was the 23.6% retracement level. It was also the highest swing in January 23rd, making it the upper side of the ascending triangle pattern. 

Therefore, Alibaba’s stock price will likely rebound in 2025. This rebound will become validated if the stock rallies above the upper side of the triangle at $115. If this happens, the next target to watch will be at $182, the 50% retracement level that is about 115% above the current level. This likely explains why Michael Burry has been actively buying the BABA stock.

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