In 2020, Alibaba Group (NYSE: BABA) was a dominant force in the Chinese e-commerce sector, often referred to as the “Amazon of China.” With its stock soaring past $300 per share, investors believed Alibaba was poised for unstoppable growth. However, a series of unforeseen challenges—including regulatory crackdowns, economic downturns, and founder Jack Ma’s public clash with the Chinese government—sent BABA into a tailspin, bottoming out at just $58 in late 2022.
Fast forward to 2025, and Alibaba appears to have regained its footing. The stock has surged more than 80% over the past year, and its latest earnings report has reinforced investor optimism. With revenue of 280.15 billion yuan surpassing Wall Street’s expectations of 277.37 billion yuan, the stage is set for a major rally.
5 Reasons Alibaba (BABA) Could Double From Here
1. Multi-Year Breakout Signals a Strong Rally Ahead
Wall Street traders often say, “The longer the base, the higher in space.” BABA has been in a three-year consolidation pattern, and its recent breakout suggests significant upside potential. With technical indicators aligning in favor of the bulls, the stock’s momentum is just getting started.
2. Government Approval Paves the Way for Growth
One of the biggest lessons from Alibaba’s 2020 decline was the importance of maintaining strong ties with the Chinese government. Recently, Jack Ma was seen shaking hands with President Xi Jinping, a clear signal that Beijing has softened its stance on the company. This renewed support from the government eliminates a major overhang on the stock and clears a path for expansion.
3. Alibaba is Undervalued Despite Recent Gains
Despite its recent surge, Alibaba remains one of the cheapest mega-cap stocks. The company’s price-to-earnings ratio is near historic lows, even as growth reaccelerates. This rare combination of strong fundamentals and a discounted valuation makes BABA an attractive investment opportunity for long-term growth investors.
4. Cloud and AI Expansion Fuel New Revenue Streams
Alibaba’s latest earnings call revealed a major catalyst: explosive AI and cloud growth. CEO Eddie Wu stated, “Our cloud revenue growth reignited to double digits at 13%, with AI-related product revenue achieving triple-digit growth for the sixth consecutive quarter.” With AI integration gaining traction, Alibaba’s cloud division is set to be a significant driver of future revenue.
5. Bullish Market Sentiment and Smart Money Inflows
Approximately 75% of a stock’s movement is correlated with the broader market. The Chinese stock market is currently in bull mode, aided by government stimulus and advancements in artificial intelligence, such as the DeepSeek AI large language model. Additionally, prominent hedge fund manager David Tepper has allocated nearly 20% of his portfolio to Chinese tech stocks, including Alibaba, Baidu (BIDU), and JD.com (JD), reflecting growing institutional confidence in the sector.
With Alibaba’s fundamentals improving, government relations stabilizing, and new revenue sources flourishing, the stock is primed for a sustained rally. Investors looking for high-upside opportunities in 2025 should keep a close eye on BABA as it continues its resurgence in the Chinese and global markets.
