Wall Street Bullish on Alibaba (BABA) Ahead of Q1 Earnings, Sees 20% Upside

Alibaba Group Holding Ltd. (BABA) is poised to report Q1 FY26 earnings on August 29, with Wall Street analysts forecasting a 20% potential upside. Consensus estimates project $2.06 EPS on $35.35 billion revenue, building on the stock's 47% YTD gain driven by AI-cloud expansion and logistics growth.

The Hong Kong Exchange recently approved Alibaba's spin-off of Banma Network Technology, its autonomous driving unit, via IPO. Post-offering, Alibaba's stake will dilute from 44.7% to 30%, streamlining capital allocation toward Core cloud and AI initiatives while improving Banma's operational independence.

Analyst sentiment remains overwhelmingly positive, with 92% maintaining bullish ratings. Margin pressures from strategic investments may emerge, but top-line growth appears resilient across e-commerce and enterprise segments.