Alibaba Q1 Earnings Preview: What to Expect From Upcoming Report

Aug 25 - Alibaba Group Holding Limited BABA heads into its upcoming earnings with growing investor attention on its cloud and artificial intelligence bets. The company will release fiscal Q1 2026 results on August 29, and analysts are watching whether this could mark a breakout quarter after months of consolidation.

Analysts expect earnings of $2.13 per share, while on the revenue side, Wall Street projects $35.28 billion

The stock has already corrected more than 20% from March highs, but traders see the current setup as constructive. Shares now sit near the 52-week moving average, and many expect a catalyst from earnings to push momentum higher.

At the core of Alibaba's growth strategy is its AI push. The company pledged $53 billion over the next three years toward infrastructure, positioning itself as a leading AI and cloud provider in China. Its Cloud Intelligence Group grew 18% in the last quarter, while AI-related products expanded at a triple-digit pace. That acceleration, combined with synergies across e-commerce and cloud operations, signals Alibaba's focus on scalable, high-margin businesses.

The international e-commerce arm, AIDC, also shows signs of profitability after years of losses. Management expects quarterly profits soon, which could reduce pressure on group earnings and improve margins. Meanwhile, Chinese government stimulus measures, including subsidized consumer loans, could boost domestic spending and benefit Alibaba's core e-commerce division.

Valuation remains another draw. BABA trades at about 11.3x FY2027 earnings with a PEG ratio of 0.55, levels that appear discounted relative to peers like Amazon AMZN and eBay EBAY. Some analysts see 5070% undervaluation compared with Western counterparts.

Risks remain, particularly regulatory uncertainty in China and U.S.-China tensions that have prompted some funds to exit Chinese equities. Still, with strong balance sheet cash and a sharpened AI strategy, Alibaba may be setting up for a pivotal earnings moment.

Is BABA Stock a Buy Before Earnings?