Street Calls of the Week
Investing.com - Bernstein has raised its price target on Alibaba (NYSE:BABA) to $200.00 from $167.00 while maintaining an Outperform rating, citing the company’s artificial intelligence capabilities and cloud revenue potential. The stock, currently trading at $173.68, has delivered an impressive 108% return year-to-date, according to InvestingPro data.
The stock has rallied strongly recently, helped by confident guidance during first-quarter reporting and the Apsara conference, along with greater investor acceptance of Alibaba’s AI capabilities, according to Bernstein.
The research firm believes Alicloud revenue could continue to accelerate, which would keep Alibaba shares well-supported beyond the near term, despite current valuation entering what they describe as "art more than science territory."
Bernstein notes that Alibaba’s share of major platform GMV (Gross Merchandise Value) in China has stopped declining in recent quarters, with their estimate for incremental GMV share stabilizing around 15-20%. The firm expects 20 points of DAU (Daily Active Users) and time spent acceleration should translate to moderate GMV acceleration.
Competition remains important to watch, as does ongoing food delivery spending, with the second quarter being the peak loss quarter, according to the research firm, which remains "somewhat doubtful that peaceful co-existence can be the stable equilibrium in domestic e-commerce."
In other recent news, Alibaba has seen several analyst actions and updates regarding its financial outlook and strategic initiatives. Jefferies raised its price target for Alibaba to $230 from $178, maintaining a Buy rating, highlighting improvements in the company’s cloud business and advancements in AI infrastructure. Similarly, CLSA increased its price target to $200 from $155, citing stronger-than-expected demand for artificial intelligence, while Erste Group upgraded Alibaba’s stock rating to Buy from Hold due to progress in AI applications.
Conversely, US Tiger Securities downgraded Alibaba to Hold from Buy, despite increasing its price target to $180 from $145, after noting the company’s exceptional performance in 2025. Alibaba’s capital expenditure is projected to exceed 380 billion yuan over the next three years, with a significant increase in global data center power usage anticipated by 2032. The company has also been focusing on monetizing AI through its cloud services division and developing proprietary AI chips. These recent developments reflect Alibaba’s strategic emphasis on AI and cloud synergies, as demonstrated at the Apsara Conference 2025.
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