Alibaba (BABA) Heads Into Q3 Earnings. What to Expect

Alibaba BABA +1.11% ▲ will report Q3 FY26 earnings on Thursday, March 19, 2026. The stock is down about 6% so far this year, weighed by a weak Chinese economy and strong competition from PDD Holdings PDD +1.16% ▲ . Wall Street analysts expect earnings of $1.62 per share, down from $3.10 in the year-ago quarter. Meanwhile, revenue is projected at about $41.59 billion, representing an 8% year-over-year increase.

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Investor focus is now shifting to Alibaba’s push into AI. Analysts want to see whether the company’s heavy investment in its Qwen models is starting to drive steady growth in its cloud business.

Recent Developments Ahead of Q3

Alibaba BABA +1.11% ▲ has made several AI-focused moves ahead of its results.

Just today, the company launched Wukong, a new AI platform for businesses. It allows companies to use AI agents to handle tasks like document editing, research, and meeting summaries. This move puts Alibaba in more direct competition with players like Microsoft MSFT +1.11% ▲ and Salesforce CRM +2.86% ▲ .

Earlier, on March 16, Alibaba announced a major reorganization. It created a new unit called Alibaba Token Hub (ATH), led by CEO Eddie Wu, which brings together its AI models, cloud business, and consumer AI apps under one structure.

Analysts’ Views on BABA Ahead of Q3 Results

Ahead of Alibaba’s Q3 results, analysts remain optimistic about the company’s AI potential. One such analyst is Gary Yu of Morgan Stanley, who reiterated an Overweight rating on Alibaba and named the stock a “Top Pick,” citing its strong position in AI.

Yu said companies that control the full AI chain have an edge. He pointed to Alphabet GOOGL +1.09% ▲ as an example and said Alibaba has built a similar setup, with its own chips, cloud business, and Qwen AI models. This helps the company grow faster, lower costs, and reduce risks from U.S. export controls.

Meanwhile, Erste Group analyst Hans Engel downgraded Alibaba from Buy to Hold. He said the company’s AI strategy is a positive, with a focus on growing cloud revenue and building its own chips to reduce reliance on outside suppliers.

However, he remains cautious due to weaker profitability. Margins have declined as Alibaba continues to spend heavily on AI and infrastructure, and rising liabilities add further pressure. As a result, he does not expect a strong earnings recovery soon and sees the stock trading in a narrow range for now.

Options Traders Anticipate a Large Move

Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.

Indeed, it currently says that options traders are expecting a 6.08% move in either direction.

Is Alibaba Stock a Buy Now?

Wall Street remains constructive on the stock. Alibaba carries a Strong Buy consensus rating based on eight Buy ratings and one Hold over the past three months. The average BABA price target stands at $197.86, suggesting roughly 44.73% upside from current levels.

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