Oil prices steady near 1-mth high on US-Iran sanctions; OPEC+ meeting awaited
Investing.com - Morgan Stanley has raised its price target on Alibaba (NYSE:BABA) stock to $165.00 from $150.00 while maintaining an Overweight rating. The stock, currently trading at $135, has delivered an impressive 62% return year-to-date. According to InvestingPro analysis, Alibaba appears undervalued based on its Fair Value estimates.
The investment bank expects Alibaba’s cloud division, Alicloud, to accelerate growth to more than 30% in the fiscal second quarter, while the company’s customer management revenue (CMR) is projected to sustain approximately 10% growth during the same period. The company maintains a strong financial position with a GOOD Financial Health Score and solid revenue growth of 5.32% in the last twelve months.
Morgan Stanley estimates that Alibaba’s Quincey Cloud (QC) losses will widen to approximately 35 billion yuan in the fiscal second quarter, up from 20 billion yuan previously reported.
The bank noted that these losses should represent a peak, as Alibaba’s management has committed to reducing user experience (UE) losses by half within the next one to two months.
Morgan Stanley maintains a sum-of-the-parts (SOTP) valuation of $200 for Alibaba shares, significantly higher than its new $165 price target. The broader analyst consensus remains highly bullish, with targets ranging from $131 to $187. Discover more detailed insights and valuations with InvestingPro’s comprehensive research report.
In other recent news, Alibaba reported a 10% year-over-year increase in revenue for the first quarter of 2025, alongside substantial investments in artificial intelligence and cloud infrastructure. Despite the revenue growth, the company experienced a decrease in adjusted EBITDA and a free cash flow outflow. Analysts have responded to these developments with adjustments to their price targets for Alibaba. BofA Securities raised its price target to $152, citing accelerated cloud revenue growth of 26% year-over-year. Bernstein increased its target to $160, highlighting mixed Q1 earnings results but noting positive operational metrics. Goldman Sachs set a new target of $163, focusing on Alibaba’s AI investments but projecting steeper losses in the quick commerce sector for the September quarter. JPMorgan raised its price target to $170, emphasizing the potential efficiency gains in Alibaba’s food delivery and quick commerce operations. These recent developments reflect Alibaba’s strategic focus on expanding its technology and commerce capabilities.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.