Alibaba vs. JD.com: Which Chinese E-Commerce Stock Has More Upside?

Alibaba Group BABA and JD.com JD are two of China’s largest e-commerce players, each playing a critical role in shaping the country’s digital economy. While Alibaba has expanded into cloud, AI, and international markets, JD.com continues to build on its strength in supply chain and core retail. Both companies are also tapping into new growth areas like food delivery and instant commerce to stay ahead in a competitive landscape.With China's economy gradually stabilizing and digital consumption rebounding, investors are watching closely to see which platform offers stronger, more sustainable growth. Let’s break down their latest earnings and strategies to find out which stock has the greater upside potential.The Case for BABA StockAlibaba has been benefiting from its continued pivot toward AI, international e-commerce and retail. In the fourth quarter of fiscal 2025, the company reported $32.81 billion in revenues, up 6.96% year over year. The Taobao and Tmall Group has been steadily improving monetization through the rollout of a 0.6% software fee and BABA’s AI-powered digital marketing tool Quanzhantui, which has helped drive a 12% rise in customer management revenues.The company’s loyalty base has also expanded, with 88VIP members surpassing 50 million, supporting higher user retention. 88VIP is Alibaba’s premium paid membership program through which members can enjoy exclusive benefits across the company’s ecosystem.Alibaba’s international commerce segment has been growing rapidly, up 22% year over year in the last reported quarter, as the company continues to localize supply chains and refine models like AliExpress Choice, which have been improving unit economics and narrowing losses.The company has also been seeing strong results from its investments in AI developments. Alibaba Cloud revenues rose 18%, with AI product revenues continuing triple-digit year-over-year growth for the seventh straight quarter. Its open-sourced Qwen3 AI model family, launched in April, had been downloaded more than 300 million times by April end, driving adoption across multiple industries.BABA has been expanding its instant commerce push with a RMB 10 billion investment into Taobao Shango and Ele.me, which has already shown promising early results in user engagement and efficiency.Overall, Alibaba has been streamlining its focus by exiting non-core assets like Sun Art and Intime, and redirecting capital into scalable segments.The Case for JD StockJD.com has been benefiting from its focus on supply chain strength, price competitiveness and retail expansion into lower-tier markets. In the first quarter of 2025, JD reported $41.79 billion in revenues, up 16.01% year over year, supported by continued growth in core retail. Electronics and home appliances rose 17%, and general merchandise grew 15%, with supermarket and fashion categories maintaining double-digit growth for five consecutive quarters.User engagement has been rising steadily. JD has been enhancing shopping frequency and ARPU through AI-powered recommendations, better after-sales services, and personalized delivery features. The company reported more than 20% year-over-year growth in active customers in the last reported quarter.JD’s 3P marketplace has been expanding with more merchants and SKUs, especially in value-driven markets. This has been driving 16% year-over-year growth in marketing and marketplace revenues, with the low-price strategy resonating across lower-tier cities.JD has also been aggressively expanding into food delivery, nearing 20 million daily orders. It has been onboarding merchants at zero commission, offering full rider insurance, and leveraging its retail infrastructure for scale. These efforts have been helping build cross-platform user engagement.JD Logistics has been contributing with 11% revenue growth, driven by continued automation in warehousing and last-mile delivery. The company’s gross profit rose 20%, and non-GAAP net income surged 43% year over year to RMB 12.8 billion, highlighting strong margin discipline.JD has also been investing in AI ad automation, expanding Jingxi in rural areas and and enhancing user operations to drive long-term growth through improved platform efficiency and stronger user engagement.Price Performance and Stock Valuation of BABA and JDPerformance metrics strengthen Alibaba's case. Year to date, shares of BABA have rallied 42.4%, while JD shares have lost 3.8%. Alibaba has also outperformed the broader Zacks Retail-Wholesale sector’s growth of 0.6% and the S&P 500 index’s decline of 1.8%. JD has underperformed both. Alibaba’s outperformance comes despite ongoing concerns about China’s economy, showing growing investor confidence in its diversified business model and focused strategy.BABA Outperforms JD, Sector in YTDImage Source: Zacks Investment ResearchIn terms of valuation, BABA’s current forward 12-month P/E ratio of 11.13X is ahead of JD’s  7.63X. Although BABA is trading at a significant premium compared to JD, the premium valuation reflects investor confidence in the company's growth potential for the rest of 2025. In contrast, JD’s current forward 12-month P/E ratio indicates more cautious market sentiment around its near-term performance.BABA and JD ValuationImage Source: Zacks Investment ResearchHow Do Earnings Estimates Compare for BABA and JD?The Zacks Consensus Estimate for BABA’s first-quarter fiscal 2026 earnings is pegged at $2.48 per share, which has been revised upward by 4.6% over the past seven days, indicating a 9.73% increase year over year. The consensus estimate for first-quarter revenues is pinned at $34.85 billion, suggesting year-over-year growth of 4.13%.Alibaba Group Holding Limited Price and Consensus Alibaba Group Holding Limited price-consensus-chart | Alibaba Group Holding Limited QuoteThe Zacks Consensus Estimate for JD’s second-quarter 2025 earnings is pegged at 97 cents per share, which has remained steady over the past seven days, indicating 24.81% year over year decline. The consensus estimate for second-quarter revenues is pinned at $46.85 billion, suggesting a year-over-year increase of 16.85%.JD.com, Inc. Price and Consensus JD.com, Inc. price-consensus-chart | JD.com, Inc. QuoteConclusionWhile both JD.com and Alibaba are growing, Alibaba is the better pick for investors right now. It has been gaining from strong momentum in cloud, AI and international e-commerce. Its fourth-quarter fiscal 2025 results showed steady growth, with cloud revenues up 18% and AI products growing fast for the seventh straight quarter. Alibaba is also expanding into instant delivery through Ele.me and Taobao Shango, adding new ways to engage users. JD is facing losses in its new business segment, particularly food delivery, and aggressive investments in AI, automation, and logistics are weighing on its near-term profitability. Hence, with a more balanced business and proven innovation, Alibaba offers more upside with less risk.Currently, BABA has a Zacks Rank #3 (Hold), making the stock a better pick compared with JD, which has a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. 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