Alibaba Tops Goldman's List of Preferred Chinese Stocks for Global Expansion
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 20 2025
0mins
Source: Benzinga
Goldman Sachs' Investment Focus: Goldman Sachs encourages investors to target Chinese companies expanding internationally, highlighting factors like a weaker yuan and China's robust supply chains as growth drivers. They identified 25 key companies, including Alibaba, CATL, and BYD, which have outperformed major indices this year.
Earnings Growth from Overseas Expansion: The bank anticipates that these companies' international growth will boost earnings by approximately 1.5% annually through 2028, with notable increases in overseas revenue for Alibaba and CATL, despite potential short-term impacts from U.S. tariffs.
Alibaba's Stock Performance: Alibaba's stock has surged nearly 97% year-to-date, driven by advancements in AI and cloud services, outperforming the NYSE Composite index. Analysts from Goldman Sachs, Daiwa Securities, and CICC express optimism about Alibaba's growth prospects in cloud revenue and e-commerce recovery.
Market Reactions and Forecasts: Despite a slight decline in premarket trading, analysts project significant growth in Alibaba's cloud revenue, with expectations of 30% year-over-year growth in the upcoming fiscal quarter, supported by new AI products and improved operational efficiencies.
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Analyst Views on BABA
Wall Street analysts forecast BABA stock price to rise
15 Analyst Rating
15 Buy
0 Hold
0 Sell
Strong Buy
Current: 127.760
Low
180.00
Averages
203.09
High
230.00
Current: 127.760
Low
180.00
Averages
203.09
High
230.00
About BABA
Alibaba Group Holding Ltd is an investment holding company mainly engaged in the provision of technology infrastructure and marketing platforms. The Company operates its business through four segments. The Alibaba China E-commerce Group segment is mainly engaged in E-commerce business, including operating Tmall Supermarket and Tmall Global, providing customer management services, product sales, as well as logistics services. It also operates quick commerce business such as Taobao Instant Commerce and Ele.me, as well as the China commerce wholesale business through 1688.com. The Alibaba International Digital Commerce Group segment is mainly engaged in international commerce retail and wholesale business, operating platforms such as AliExpress, Trendyol, Lazada and Alibaba.com. The Cloud Intelligence Group segment mainly provides public and non-public cloud services. The Other segments primarily include the operations of Freshippo, Cainiao, Alibaba Health and other business.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Quick Commerce Potential: While the e-commerce segment is maturing, quick commerce revenue surged 57% year-over-year to approximately $2.9 billion, demonstrating Alibaba's potential to expand market share and enhance profitability in a competitive landscape.
- AI Revenue Surge: Alibaba's AI-related revenue has achieved triple-digit growth for the 11th consecutive quarter, with expectations that AI revenue will account for half of the cloud segment's total revenue within a year, positioning it as a primary growth engine for the company.
- Investment and Profit Pressure: Despite recent investments in AI leading to a small operating loss last quarter, management anticipates a quick turnaround in profitability for the cloud business, with shares trading around $130 and a forward P/E ratio of just 19, indicating strong investment potential.
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- AI and Cloud Growth: Alibaba's AI and cloud business achieved a 38% revenue increase last quarter, with external customers contributing 40% of that growth, and AI revenue is expected to account for half of the segment's total revenue within a year, becoming the primary growth engine.
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- Profitability Recovery Outlook: Although the company reported a small operating loss last quarter due to AI investments, management expects strong momentum in the cloud computing business to quickly improve profitability, with earnings per share projected to grow at an average rate of 24% over the next three years, highlighting the investment's appeal.
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- ETF Trading Mechanism: ETFs trade similarly to stocks, where investors are buying and selling 'units' that can be created or destroyed based on demand, impacting the underlying assets held within the ETF.
- Liquidity Monitoring: Weekly monitoring of changes in ETF shares outstanding helps identify significant inflows or outflows, where inflows necessitate purchasing underlying assets, while outflows may lead to selling, thus affecting individual stock performance.
See More
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- Cloud Business Growth: Alibaba's cloud computing segment grew 38% last quarter, with external customer growth at 40%, indicating a strong acceleration in profitability driven by increased AI services and proprietary AI accelerator chips.
- Quick Commerce Potential: While the e-commerce segment is maturing, quick commerce revenue surged 57% year-over-year to approximately $2.9 billion, demonstrating Alibaba's potential to expand market share and enhance profitability in a competitive landscape.
- AI Revenue Surge: Alibaba's AI-related revenue has achieved triple-digit growth for the 11th consecutive quarter, with expectations that AI revenue will account for half of the cloud segment's total revenue within a year, positioning it as a primary growth engine for the company.
- Investment and Profit Pressure: Despite recent investments in AI leading to a small operating loss last quarter, management anticipates a quick turnaround in profitability for the cloud business, with shares trading around $130 and a forward P/E ratio of just 19, indicating strong investment potential.
See More
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- Oil Price Plunge: Oil prices dropped over 5% on Wednesday after Secretary of State Marco Rubio indicated that Washington was giving Iran talks 'every chance to succeed,' reflecting market sensitivity to diplomatic efforts and potentially impacting energy sector profitability.
- Escalation of Military Actions: New U.S. airstrikes in Iran targeted a military site deemed a threat to U.S. forces and commercial maritime traffic, adding uncertainty to the ongoing diplomatic negotiations and prompting investors to reassess risk levels in the market.
- Strong Tech Stock Performance: Shares of cloud-based AI and data platform company Snowflake surged 36% following a strong earnings report and a $6 billion investment plan in Amazon Web Services, showcasing investment enthusiasm and market confidence in the tech sector amid rising AI demand.
- Inflation Data Focus: Investors are closely watching the upcoming April inflation reading, which is expected to influence the Fed's future rate decisions, as Minneapolis Fed President Neel Kashkari emphasized that lowering inflation remains a top priority, indicating market sensitivity to economic policy.
See More
SpaceX Plans Record-Breaking IPO on Nasdaq as SPCX
- Revenue and Profitability: SpaceX anticipates a revenue of $18.7 billion in 2025, a 33% increase, yet faces a net loss of $4.9 billion, highlighting significant challenges in profitability, particularly as its only profitable segment, Starlink, experiences declining user revenue.
- Starlink Performance: As the core business, Starlink generated $11.4 billion in revenue last year, accounting for 61% of total revenue and achieving $4.4 billion in operating profit, but the average monthly revenue per user has dropped from $99 in 2023 to $66 in Q1 2026, indicating increased market competition.
- IPO Valuation and Risks: Targeting a valuation near $2 trillion, SpaceX's IPO could become the largest in history, but this high valuation carries risks associated with its unprofitable business model and the uncertainties surrounding the Starship program, potentially leading to significant investor losses.
- Historical Lessons and Investment Caution: Historically, the largest IPOs tend to underperform, as seen with Saudi Aramco's shares trading below their listing price post-2019, prompting investors to exercise caution and consider observing SpaceX's performance post-listing before making investment decisions.
See More
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- IPO Overview: SpaceX filed to go public earlier this month, planning to list on Nasdaq under the ticker SPCX with a valuation target of around $1.75 trillion, potentially exceeding $2 trillion, which would make it the largest IPO in history, aiming to raise approximately $75 billion, significantly surpassing the record set by Saudi Aramco in 2019.
- Complex Financials: According to the prospectus, SpaceX's revenue reached about $18.7 billion in 2025, a 33% increase year-over-year, yet it reported a net loss of $4.9 billion, highlighting challenges in profitability, particularly as its only profitable segment, Starlink, faces declining average revenue per user while relying on cash from other loss-making segments.
- Starlink Performance: As SpaceX's primary revenue driver, Starlink generated $11.4 billion last year, accounting for 61% of total revenue, but its average monthly revenue per user dropped from $99 in 2023 to $66 by Q1 2026, reflecting increased market competition and pricing strategy adjustments.
- Historical Lessons and Risks: Despite SpaceX's valuation nearing $2 trillion, history shows that the largest IPOs often fail to meet expectations, as evidenced by Saudi Aramco and Alibaba's lackluster post-IPO performance, prompting investors to carefully assess SpaceX's future performance and the inherent risks associated with its unproven Starship program.
See More
Alibaba's AI Investment Outlook Analysis
- E-commerce Challenges: Alibaba faces pressure from PDD Holdings and ByteDance despite its quick commerce model's 57% year-over-year revenue growth to approximately $2.9 billion, as the overall e-commerce business remains in a slow growth phase, impacting profitability.
- AI and Cloud Growth: Alibaba's AI and cloud business achieved a 38% revenue increase last quarter, with external customers contributing 40% of that growth, and AI revenue is expected to account for half of the segment's total revenue within a year, becoming the primary growth engine.
- Chip Advantage: Alibaba launched the next generation of its high-end Zhenwu chip series, the M890, being the only Chinese cloud provider developing and sourcing its own chips, which provides a structural advantage for revenue growth and gross margin improvement.
- Profitability Recovery Outlook: Although the company reported a small operating loss last quarter due to AI investments, management expects strong momentum in the cloud computing business to quickly improve profitability, with earnings per share projected to grow at an average rate of 24% over the next three years, highlighting the investment's appeal.
See More
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- Price Fluctuation Analysis: AVEM's 52-week low is $63.91 and high is $96.69, with the current trading price at $96.66, indicating the stock is nearing its high point, which may attract investor interest.
- Technical Analysis Tool: Comparing the current stock price to the 200-day moving average can provide valuable insights for investors, helping to assess market trends and potential price movements.
- ETF Trading Mechanism: ETFs trade similarly to stocks, where investors are buying and selling 'units' that can be created or destroyed based on demand, impacting the underlying assets held within the ETF.
- Liquidity Monitoring: Weekly monitoring of changes in ETF shares outstanding helps identify significant inflows or outflows, where inflows necessitate purchasing underlying assets, while outflows may lead to selling, thus affecting individual stock performance.
See More
