Alibaba Shares Skyrocket Over 10% Amidst Stellar Q3 Results and AI Investment Surge

In recent developments, Alibaba Group's shares saw a significant uptick, with its Hong Kong stock rising over 10% at 133 HKD per share, following the release of their 2025 fiscal Q3 financial results. The company reported an 8% year-on-year revenue increase, reaching RMB 2801.5 billion, and a remarkable 333% rise in net profit, totaling RMB 464.34 billion. CEO Wu Yongming highlighted plans to launch a deep inference model soon, with a pledge to invest more in cloud and AI infrastructure over the next three years than in the past decade combined.

These impressive financial results have led to increased investor confidence, prompting major financial institutions to raise Alibaba's target stock price. Goldman Sachs notably adjusted their targets, emphasizing the unexpected growth in AI-related capital expenditure and projecting a surge in Alibaba Cloud’s revenue growth to 23% and 25% for the fiscal years 2026 and 2027, respectively. The recent substantial increase in capital spending, primarily directed towards strengthening cloud infrastructure, supports these optimistic forecasts.

HSBC analysts also expressed a positive outlook, expecting Alibaba’s cloud business revenue to accelerate further due to the robust demand for AI capabilities. With impressive growth in key business areas, including customer management and cloud service expansion, HSBC adjusted their forecast for Alibaba Cloud's revenue growth to 17% by 2026. The anticipation of heightened AI inference demand only solidifies this upward trend.

Similarly, Morgan Stanley and other analysts maintained strong positions on Alibaba's stock, citing the undervaluation of Alibaba Cloud, especially considering its advances in generative AI and its dominant market position in China. With increased AI feature consumption expected to raise revenue forecasts, Alibaba Cloud's 2026 fiscal revenue growth projections might see a further increase. Concurrently, improvements in China's domestic e-commerce landscape are expected to bolster Alibaba's profitability, enhancing earnings forecasts.

In summary, Alibaba's robust financial performance and strategic investments underscore its potential for sustained growth. As the company continues to enhance its technological capabilities and expand its cloud infrastructure, analysts remain optimistic about Alibaba’s future prospects in the dynamic AI and e-commerce sectors.