Is Alibaba (BABA) Stock a Buy Ahead of Earnings Wednesday?

TLDR

• Alibaba reports Q4 FY26 earnings on May 13, before the U.S. market opens.
• Wall Street expects EPS of $0.90, down from $1.83 a year ago, with revenue projected at ~$36.35 billion (+12% YoY).
• Net profit is forecast at 11.71 billion yuan, down from 12.96 billion yuan the prior year.
• A food delivery price war with JD.com and Meituan has pressured profits across the sector.
• Options traders are pricing in a 6.88% move in either direction following the report.

Alibaba (BABA) stock is down about 6% this year, trading at $136.88 in premarket Wednesday. All eyes now turn to earnings.

Alibaba Group Holding Limited, BABA

The Chinese internet giant reports Q4 FY26 results before the U.S. market opens on May 13. Wall Street expects earnings per share of $0.90, a sharp drop from $1.83 in the same quarter last year.

Revenue tells a different story. Analysts project roughly $36.35 billion, a 12% year-over-year increase. Total revenue in yuan terms is forecast at 282.44 billion, up from 255.29 billion a year ago.

Net profit, however, is expected to fall. The consensus sits at 11.71 billion yuan, down from 12.96 billion yuan in Q4 FY25.

Two things are driving that profit squeeze: heavy investment in AI infrastructure and ongoing losses from Alibaba’s quick-commerce and food delivery operations.

Alibaba, JD.com, and Meituan have been fighting a price war in food delivery. It’s been good for consumers, not so good for margins. JD.com reported its own results Monday, showing resilience in core retail despite the same pressures.

Investors will be watching how fast Alibaba can bring those quick-commerce losses down. That’s the short-term question. The longer-term one is whether AI can more than make up for it.

AI Is the Big Storyline

Morgan Stanley said Alibaba is strengthening its position in China’s AI market, pointing to growing adoption of its Qwen AI model. The firm sees Alibaba as a leading choice for companies increasing AI spending, given its broad offerings across cloud, models, and applications.

Macquarie analyst Ellie Jiang trimmed her price target slightly to $175.90 from $176.20 but kept an Outperform rating. She expects the cloud business to remain a key growth area this quarter, supported by rising enterprise AI adoption.

Benchmark Research analyst Fawne Jiang has a Buy rating with a $220 price target. She wrote that while near-term investment may pressure margins, she views AI as “a durable multi-year growth driver supporting both revenue growth and longer-term margin expansion.”

What the Options Market Is Saying

Options traders are bracing for movement. The at-the-money straddle puts the expected post-earnings swing at 6.88% in either direction.

That’s a meaningful range on a stock already down 6% year-to-date. Weak Chinese economic conditions and investor concern over AI spending costs have kept pressure on the stock.

Despite that, Wall Street’s overall stance remains constructive. Alibaba carries a Strong Buy consensus rating based on 14 Buy ratings and two Holds over the past three months.

The average price target stands at $184.07, implying roughly 34% upside from current levels.

Alibaba will report before the open on May 13.

The post Is Alibaba (BABA) Stock a Buy Ahead of Earnings Wednesday? appeared first on CoinCentral.