Alibaba Earnings Preview: Stock up 50% in 2025, and 7% Stock Move Expected

The company’s recently updated Qwen 2.5-Max may outperform DeepSeek-V3

• Alibaba will report quarterly earnings Thursday, before the market opens.
• The stock is already up 50% in 2025.
• It’s expected to report earnings-per-share of $2.69 on $38.45 billion in revenue.
• Information on the AI partnership with Apple will be a focus of the earnings call.

When I checked out the price chart for Alibaba (BABA), I was taken aback by the recent surge. After opening the year at $85.10, BABA stock currently sits around $127. That's a 50% increase in just a month and a half into the new year. After learning about the new partnership with Apple (AAPL) though, and how Alibaba's AI technology will power iPhone features in China, it made all the sense in the world. This is just what Alibaba needed to spark new interest in the stock and the company overall, especially with extremely tough smartphone competition overseas.

Alibaba is expected to report earnings-per-share (EPS) of $2.69 on $38.45 billion in revenue Thursday morning.

Both figures are significantly higher, after missing both EPS and revenue estimates last quarter.

With such an interest in AI these days, Alibaba's Qwen 2.5-Max has been said to outperform even DeepSeek-V3 after the recent update.

It's clear that Alibaba's AI initiatives are favored by the market after such a strong rise in the stock price this year, and it'll be interesting to hear what they have to say on the earnings call.

In the last earnings call, Eddie Wu, CEO of Alibaba Group, offered positive sentiment: “This quarter we continued to invest in the user experience and strengthen product offerings to serve our consumers. We entered into long-term collaborations with industry peers to broaden payment and logistics services on Taobao and

Tmall platforms, which we expect will accelerate our overall growth. Growth in our cloud business accelerated from prior quarters, with revenue from public cloud products growing in double digits and AI-related product revenue delivering triple-digit growth. We are more confident in our core businesses than ever and will continue to invest in supporting long-term growth. Our other businesses continued to improve their operating efficiency, with most of them continuing to increase their profitability or reduce losses...”

We should expect a volatile 2025 for BABA stock, with such large moves realized so far in 2025.

Looking at the options market can help us put context around the expected stock price move for BABA for this week's earnings call. Implied volatility is presented on a one-standard-deviation annual basis, but this estimate can be adjusted for specific options expirations.

For this week's expiration, BABA boasts a +/- $9.51 expected stock price move, which is around 7% of the stock price. This is on the higher end of the range for typical earnings announcements that land between 5% to 10% of the notional value of the stock price.

Looking to May 2025, we can see a stock price expected move of +/- $20.77. In other words, this week's earnings call accounts for almost 50% of the implied
volatility in BABA stock over the next 87 days. That's a big number, and we should expect nothing but craziness this week for Alibaba.

Bullish on BABA stock for earnings

If you're bullish on BABA stock for earnings this week, you're looking for an EPS and revenue beat. If that doesn't happen, you're at least looking for a real tangible plan for the Apple partnership to be revealed. The recent rally is promising, but bullish traders will want to see continuation on the positivity with real tangible numbers during the earnings call.

Bearish on BABA stock for earnings

If you're bearish on BABA stock for earnings, you're likely fading the good news and good performance that's implied from the increase in EPS and revenue estimates. While the partnership with Apple could be the saving grace for BABA's stock price, the stock has gone up 50% in just over a month, which is a stifling pace. If there is any bearish sentiment for Alibaba, we could see the stock price retreat back to 2024 levels.

With the announcement coming Thursday before the market opens, the last day to trade BABA stock is tomorrow before the market closes. Join us on Options Trading Concepts Live on tomorrow at 11 a.m. CST for a full analysis of options strategies ahead of Thursday morning's earnings call.

Mike Butler, tastylive director of market intelligence, has been in the markets and trading for a decade. He appears on Options Trading Concepts Live, airing Monday-Friday. @tradermikeyb  

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