Alibaba Group Holding Limited (NYSE:BABA) is slashing costs and reshaping its future, cutting more than a third of its workforce in 2025 as it pivots aggressively toward artificial intelligence.
Alibaba Workforce Shrinks 34% In 2025
The Chinese e-commerce juggernaut reduced its workforce by about 34% in 2025, ending the year with 128,197 employees, down from 194,320 a year earlier. The company trimmed headcount after selling its offline retail assets and restructuring operations to focus more on AI, CNBC reported on Friday.
These moves come as Alibaba deals with weak earnings, including a 67% drop in quarterly profit and modest revenue growth, partly due to heavy spending on promotions to defend its e-commerce business.
Preview Of Alibaba’s Strongest AI Model
The Jack Ma co-founded tech giant unveiled Qwen3.5-Max-Preview, its most advanced AI model to date, as it pushes to compete with global leaders. The model ranked as the top Chinese system on a major benchmarking platform and demonstrated strong performance in areas such as mathematics, SCMP reported on Friday.
The company continues to expand its Qwen model family, launch enterprise-focused tools such as the Wukong AI service, and raise cloud and storage prices to improve monetization.
Alibaba Targets $100 Billion Of AI Revenue In Five Years
Alibaba is aiming to generate over $100 billion annually from cloud and AI within five years, positioning these segments as key growth drivers. The company is investing more than $53 billion in AI infrastructure and reorganizing its business to focus on enterprise customers and AI services.
With strong demand for AI products and rising usage across its platforms, Alibaba is working to turn its expanding AI ecosystem into a major source of long-term revenue.
First Eagle views the stock as undervalued based on its AI potential. The fund believes Alibaba’s current valuation largely reflects its e-commerce business, with its AI segment offering additional upside that the market has yet to fully price in.
Technical Analysis
Alibaba is trading 9.5% below its 20-day SMA and 19.5% below its 100-day SMA, keeping the near- and intermediate-term trend pointed down despite Friday’s early bounce attempt.
Shares are down 8.77% over the past 12 months and are positioned closer to their 52-week low ($95.73) than their 52-week high ($192.67).
The RSI is at 26.45, which is oversold and signals that selling pressure has been extreme in the near term. Meanwhile, MACD is at -6.5556 and below its signal line at -6.4538, reinforcing that downside momentum remains in control, even if a bounce develops.
The combination of oversold RSI (below 30) and bearish MACD suggests mixed momentum.
- Key Resistance: $139.00
- Key Support: $117.50
Earnings & Analyst Outlook
Looking further out, the next major catalyst for the stock arrives with the May 14, 2026 (estimated) earnings report.
- EPS Estimate: $1.01 (Down from $1.73 YoY)
- Revenue Estimate: $34.84 Billion (Up from $32.58 Billion YoY)
- Valuation: P/E of 16.4x (Suggests fair valuation relative to peers)
Analyst Consensus & Recent Actions: The stock carries a Buy rating with an average price target of $187.69. Recent analyst moves include:
- Jefferies: Buy (Lowers Target to $212.00) (Mar. 19)
- Jefferies: Buy (Lowers Target to $225.00) (Jan. 8)
- Freedom Capital Markets: Downgraded to Hold (Jan. 6)
Benzinga Edge Rankings
Below is the Benzinga Edge scorecard for Alibaba, each representing eight Ordinary Shares, highlighting its strengths and weaknesses compared to the broader market:
- Momentum: Weak (Score: 14.43) — The stock is lagging, which fits with its position well below key moving averages.
- Quality: Neutral (Score: 62.5) — Fundamentals screen as steady, suggesting the current pressure is more about price trend than balance-sheet stress.
- Value: Strong (Score: 89.62) — Valuation factors screen attractively, which can draw dip-buyers when the chart gets stretched to the downside.
- Growth: Neutral (Score: 58.71) — Growth metrics are middle-of-the-pack, so the stock may need execution and sentiment improvement to re-rate higher.
The Verdict: Alibaba’s Benzinga Edge signal reveals a value-tilted setup with weak momentum. That combination often points to a contrarian profile—potentially attractive on valuation, but still needing technical confirmation (like reclaiming resistance) before the trend picture improves.
Top ETF Exposure
- SPDR NYSE Technology ETF (NYSE:XNTK): 3.53% Weight
- Robo Global Artificial Intelligence ETF (NYSE:THNQ): 2.57% Weight
- Nomura Focused Emerging Markets Equity ETF (NASDAQ:EMEQ): 4.57% Weight
Significance: Because BABA carries significant weight in these funds, any significant inflows or outflows will likely trigger automatic buying or selling of the stock.
Price Action
BABA Price Action: Alibaba shares were up 0.68% at $125.75 during premarket trading on Friday, according to Benzinga Pro data.
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