Alibaba's 55% Rally Gets Goldman's $1 Billion Boost - Will Q4 Earnings Justify The Bet?

Alibaba Group Holding Ltd. BABA will report its fiscal fourth-quarter earnings on Thursday before the market opens. Wall Street expects earnings per share of $1.37 and revenue of $33.21 billion as investors look for clues on whether Alibaba’s AI-heavy transformation is beginning to drive results.

The stock is up 65.6% over the past year and 54.9% year-to-date, surging more than 15% in just the past month. Much of that rally has been fueled by renewed investor optimism around Alibaba's cloud and artificial intelligence strategy – and a stunning endorsement from Goldman Sachs.

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In a recent regulatory disclosure, Goldman revealed it had purchased over $1 billion worth of BABA shares in the first quarter, making it the largest institutional buyer of the stock last quarter. That vote of confidence is especially notable ahead of earnings as investors evaluate whether the company's $52.4 billion AI infrastructure push is translating into performance.

Let's look at what the charts indicate for Alibaba and how it maps against Wall Street estimates.

Strong Bullish Momentum Ahead Of Q4 Earnings

Alibaba stock is showing strong bullish momentum heading into the print.

Chart created using Benzinga Pro

At $131.65, BABA stock trades above all key short- and long-term moving averages. The eight-day simple moving average (SMA) is $127.32, the 20-day SMA is $120.41, the 50-day SMA is $125.95 and the 200-day SMA sits at $101.92. BABA stock is comfortably above all of these indicators – suggesting a sustained uptrend.

Momentum indicators echo the bullish sentiment. The Moving Average Convergence Divergence (MACD) is at 2.42, while the Relative Strength Index (RSI) stands at 62.14 – still below the overbought threshold of 70.

ZeroSearch To Give Competitive Edge To Alibaba

Meanwhile, for Alibaba, AI remains front and center. Chairman Joe Tsai recently told employees that AI will be the core engine behind all of Alibaba's businesses in the next 3-5 years.

The company also unveiled a new training framework – "ZeroSearch" – that it claims can reduce AI training costs for search models by up to 88%. Innovations like this could give Alibaba's cloud division a competitive edge in the crowded AI infrastructure market.

Alibaba Analysts See 32% Upside

Alibaba Ratings & Consensus Estimates: The consensus analyst rating on Alibaba stock is Buy, with a price target of $147.25. More recently, analysts at Citigroup, Mizuho, and Benchmark have issued bullish ratings, with an average price target of $176.33—implying a 32% upside from current levels.

BABA Price Action: Alibaba stock was trading at $131.65 at the time of publication.

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