TLDR
- Jefferies reduced Alibaba price target to $225 from $231, maintains Buy rating and top 2026 pick status
- Morgan Stanley slashed target to $180 from $200 on core e-commerce deterioration and weak China consumers
- Cloud business posted 34% year-over-year growth fueled by AI demand
- Stock dropped 2.5% premarket Friday after 78% rally over past year
- China set to approve Nvidia H200 processor sales, benefiting Alibaba as major chip buyer
Jefferies lowered its Alibaba price target to $225 from $231 Thursday. The firm kept its Buy rating and named the stock its top pick for 2026.
Alibaba Group Holding Limited, BABA
The new target suggests 53% upside from the current price of $146.75. Jefferies pointed to AI and cloud opportunities as reasons for optimism.
Morgan Stanley took a harder stance. The bank cut its target to $180 from $200 while maintaining a Buy rating.
The split reflects different views on e-commerce. Morgan Stanley warned Alibaba’s core shopping business has started to decline.
Weak consumer spending in China is the culprit. The bank expects pressure through the first half of fiscal 2027 due to tough year-over-year comparisons.
Morgan Stanley said overall profitability could weaken near term. Cloud strength may not be enough to offset e-commerce headwinds.
Cloud Division Grows 34% Year-Over-Year
Alibaba’s cloud business jumped 34% last quarter. Jefferies said AI demand continues to drive acceleration in the segment.
The firm expects solid Quick Commerce progress across metrics for December. Overall revenue growth hit 5.21% for the period.
Last quarter’s results beat analyst expectations. Cloud performance powered the outperformance against forecasts.
Customer Management Revenue climbed 10% year-over-year. Benchmark kept a Buy rating, citing cloud and CMR strength.
Continued AI Spending Expected
Jefferies anticipates more investment in Alibaba’s “All Others” segment. This covers AI initiatives across the company.
Bernstein lowered its target to $190 from $200 but kept an Outperform rating. The firm acknowledged Alibaba’s AI focus.
Macquarie held an Outperform rating with a $218.80 target. The bank noted AI cloud demand and resilient ad revenue.
Freedom Capital Markets downgraded Alibaba from Buy to Hold. The firm set a $140 target, citing rising costs.
The stock fell 2.5% in premarket Friday. Shares gained 5.3% Thursday after recent weakness.
Alibaba rallied 78% over the past year. Chinese tech stocks gained momentum throughout 2025 before recent pullbacks.
China is preparing to allow Nvidia H200 processor sales in the country. Alibaba is a major buyer of Nvidia equipment for its cloud operations.
