Alibaba Q4 Preview: Guidance, Tariff Impact in Q1 Will Set the Direction

Alibaba (NYSE:BABA) is capitalizing on the increasing demand for AI inference and its early adoption of generative AI across both consumer and enterprise segments. Its cloud division, AliCloud, is positioned as the main growth driver, expected to benefit from the rising AI inference needs.

This is particularly advantageous as competitors like Tencent (HK:0700) and Bytedance prioritize internal applications, enabling AliCloud to expand its external customer base and strengthen its revenue and competitive edge in the AI cloud industry.

Key Highlights

• Alibaba’s dominance in China, where it serves approximately 80% of the e-commerce market, highlights its significant presence in a high-density population region. This strong market position provides Alibaba with a solid foundation for continued expansion and growth in the rapidly evolving digital economy.
• The company is actively working to expand its global footprint by strengthening its international commerce operations through platforms like Lazada, AliExpress, Trendyol, and Daraz.
• BABA is ahead of everyone in China except DeepSeek in the AI models.
• Alibaba has experienced some relief from delisting concerns in recent negotiations, but its fundamentals remain vulnerable. Its higher exposure to tariffs and regulatory pressures can impact its operations, profitability, and growth prospects.

BABA Q4 2024 earnings premarket Thursday May 15, 2025

Financial Health History

Financial Health for Meta (NASDAQ:META) Platform is determined by ranking the company on over 100 factors against companies in the Consumer Discretionary sector and operating in developing economic markets.

Option Statistics

Put/Call ratio suggests the following three scenarios:

• With Put/Call ratio between 1.2504 to 0.219 for the next four upcoming expiries, suggests that the overall option traders are all over.
• Lower earnings and guidance could trigger a sharp sell-off.
• Better-than-expected earnings and guidance would trigger a gradual rise.
• The option market is showing a large net positive Gamma at 135, 140 & 145 strike versus net negative gamma exposure at 130, 120 & 113 strike over the spectrum of May 2025 to June 2025.

Technical Analysis Perspective

• BABA penetrated 139/140 resistance in mid-February 2025 after January 2022.
• Prices failed to hold gains above 139/140 for more than two weeks, showing signs of selling around 140 level.
• Prices found support around 115 a rising trendline from the January 2025 low at 80.
• Stock is facing stiff resistance between 135/137.
• A breakout above post earnings would eye 149/150 handle.
• A rejection of 135/137 would pave the way for a range trade between 137 – 126.50 with more downside potential to 1120.

Weekly Candlestick Chart

BABA Seasonality Chart

• BABA closes 1.7 % higher in May 64% of the time since 2014.

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Ali Merchant is a seasoned financial market professional with expertise in Technical Analysis, Treasury & Capital Markets, Trading, Sales, Research, Training, Fund & Relationship Management, Fintech, and Digitalization. He is a CMT charter holder and an active member of CMT Association, USA, American Association of Professional Technical Analysts, and CMT Association of Canada. He has worked on various roles and organizations in North America and the GCC, such as ABN Amro bank, Thomson Reuters, Refinitiv, MAK Allen & Day Capital Partners (WA:CPAP), and Bridge Information Systems.

He is the founder of TwT Learnings, provides financial market training. Follow US https://twtlearning.com & “X” formerly Twitter “@twtlearning.”