Alibaba Shares (BABA) Hit 12-Month High Ahead of Earnings Report

Chinese e-commerce giant Alibaba is set to release its quarterly earnings report on 20 February. The Wall Street Journal cites optimistic analyst estimates, projecting gross revenue of 279.03 billion yuan (approximately $38 billion), up from 260.35 billion yuan a year ago and 236.50 billion yuan in the previous quarter.

Investor sentiment has been buoyed by Alibaba co-founder Jack Ma’s presence at an event with Chinese President Xi Jinping. According to Barron’s, this signals government efforts to restore confidence in the private sector, particularly in technology. At present, such factors may be having a greater impact on the stock market than geopolitical headlines or Trump’s tariff policies.

These and other drivers—including a recent partnership between Alibaba and Apple to integrate AI features into the iPhone 16 series—have fuelled bullish momentum. As a result, Alibaba shares (BABA) have surged nearly 20% in February, reaching their highest level since February last year.

Technical Analysis of Alibaba Shares (BABA)

In our previous analysis on 29 January, we noted that BABA’s price movements were forming key levels for an Andrews' Pitchfork pattern, indicating a bullish outlook.

Currently, the price has:
→ Surpassed the October high near $118.
→ Gained bullish momentum after consolidating around the psychological $100 level.

The RSI indicator signals overbought conditions, suggesting a potential correction. However, given the strong news flow, any pullback may be shallow.

Alibaba (BABA) Stock Forecasts

According to BarChart, after years of underperformance, many investors are looking at China with renewed optimism for 2025. Hedge fund Appaloosa Management’s founder and president, David Tepper—whose net worth stands at $21.5 billion—recently acquired Alibaba shares, as per the latest 13F filings.

He may believe that the Chinese stock market is significantly undervalued, based on the “Warren Buffett Indicator,” which compares a country's total market capitalisation to its GDP. A ratio below 100 suggests undervaluation, while a higher figure indicates overvaluation. Currently, China’s market cap-to-GDP ratio stands below 70%, compared to over 200% for the US.

Tepper is not alone in his bullish stance. According to TipRanks:
→ 7 out of 8 analysts surveyed recommend buying BABA shares.
→ The average 12-month price target for BABA is $129.13.

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