Alibaba Group (BABA) will report fiscal third quarter earnings early Thursday, with shares of the Chinese e-commerce giant hovering near a three-year high. The stock rallied 20% last week, helped by news that Apple (AAPL) will be working with Alibaba to introduce AI features to iPhone in China.

Meanwhile, Baird analyst Colin Sebastian reiterated an outperform call on Alibaba stock in a client note Wednesday. He also upped his price target for Alibaba to 125, from 110.

"While the macro environment, government regulation, and aggressive competition are headwinds/overhangs, those are well understood, and investors are now waking up to accelerating cloud services growth and what should be improving e-commerce segment performance (including take rate expansion)," Sebastian wrote.

On the stock market today, Alibaba stock is down a fraction at 125.88. U.S.-listed Alibaba stock is up 48% in 2025.

Shares of Alibaba got a boost earlier this week following reports that Alibaba founder Jack Ma was among Chinese business leaders who recently met with President Xi Jinping. Alibaba stock has struggled to regain momentum following a government tech crackdown in China four years ago.

Alibaba Earnings Preview

Overall, analysts polled by FactSet expect Alibaba to post earnings of 19.47 yuan per American depositary share for its December quarter, a 3% year-over-year increase.

Sales are projected to rise 7% to 278.49 billion yuan, according to FactSet, or $38.26 billion.

Sebastian wrote Wednesday that investor sentiment on Alibaba stock is improved heading into the report, helped by its AI push.

"Reports suggest Alibaba's cloud platform is a close collaborator with both DeepSeek and Apple Intelligence (for iPhones in China), which we think are clear endorsements of AliCloud capabilities, and helps contextualize the AI platform opportunity," Sebastian wrote.

Analyst consensus for Alibaba's Cloud Intelligence Group projects revenue will rise 9.8% to 30.8 billion yuan, according to FactSet.

Meanwhile, Alibaba said in November that it is restructuring its e-commerce operation to combine its domestic Taobao and Tmall Group with its international e-commerce operations in a single business division. International retail sales jumped in Alibaba's September-ended quarter while consumer spending in China remains sluggish.

Analysts with JPMorgan, who hold a positive overweight call on Alibaba stock, said in a recent client note that they expect improved gross merchandise volume growth compared to Alibaba's September quarter, based on the company describing a strong Singles Day sales performance in November.

Alibaba Stock: Technical Ratings

Alibaba stock broke out of a cup-with-handle pattern on Feb. 7, above a 103.67 buy point, according to MarketSurge. Shares reached a high of 129.02 Tuesday, Alibaba's highest level since February 2022.

Shares of the Chinese tech giant rocketed higher last fall after the Chinese government said it would take steps to stimulate economic growth. But enthusiasm about the efforts waned late in the year, with Alibaba stock ending with a modest 10% gain overall gain for 2024.

But shares have steadily gained this year. Alibaba stock has an IBD Composite Rating of 95 out of a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.

Further, Alibaba's IBD Relative Strength Rating is 95 out of 99. The RS Rating means that BABA stock has outperformed 95% of all stocks in IBD's database over the 12 months.

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