Alibaba Shares Are Gaining on AI Optimism. Here's What to Know.

Alibaba (BABA) shares ripped higher on Wednesday following an interim corporate update that signaled robust AI growth and clear signs of operational stabilization. 

The bullish momentum even saw BABA break above its 20-day moving average (MA), signaling bulls are now starting to take back control for the near term. 

Despite today’s rally, however, Alibaba stock remains down about 25% versus its price at the start of this year. 

What’s Driving Alibaba Stock Higher Today

Investors hailed BABA this morning after the briefing pointed to accelerated AI-driven growth in the company’s cloud computing business. 

According to data from Frost & Sullivan, Alibaba Cloud now commands a 40.1% share of China’s full-stack artificial intelligence cloud ecosystem — more than the combined footprint of its biggest domestic rivals. 

In the June quarter, the Chinese tech giant also consolidated its diverse suite of AI tools under the flagship Qwen brand, solidifying its reputation as the infrastructure backbone for the country’s enterprise tech. 

Note that BABA shares have a history of gaining 3.79% on average in July — followed by another 2.08% rally in August — a seasonal trend that improves their near-term appeal. 

Should You Buy BABA Shares Ahead of Q1 Earnings?

Beyond the bullish AI updates, improving business efficiency also makes Alibaba shares attractive for the remainder of 2026. 

According to the pre-earnings briefing, the company’s instant-commerce and on-demand delivery-related losses narrowed significantly in the June quarter. 

This helped quiet recurring concern regarding heavy capital expenditure (capex) ahead of BABA’s full earnings report on Sept. 4. 

Consensus is for the giant to report $2.44 a share of earnings for its fiscal Q1 — up an exciting 29% on a year-over-year basis. 

Note that BABA currently pays a dividend yield of 0.96%, which makes it even more compelling, at least for income-focused investors. 

Wall Street Remains Bullish on Alibaba

Wall Street analysts continue to view BABA stock as egregiously undervalued at current levels. 

The consensus rating on Alibaba sits at “Strong Buy,” with the mean price target of about $182 indicating potential upside of more than 65% from current levels.