Alibaba (BABA – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Fawne Jiang from Benchmark Co. maintained a Buy rating on the stock and has a $190.00 price target.
Fawne Jiang has given his Buy rating due to a combination of factors, primarily centered around the anticipated structural rerating of Alibaba’s shares by 2025. This expectation is driven by fundamental improvements in Alibaba’s core businesses, including ecommerce, cloud, and AIDC. The ecommerce segment is expected to experience growth acceleration, while AIDC is projected to achieve profitability by FY26. Additionally, the reduction of losses in other segments and the divestment of non-core assets are anticipated to provide opportunities for upward earnings revisions, potentially recovering previously depressed valuation multiples.
Furthermore, Jiang highlights Alibaba’s strong positioning to capitalize on the growing AI adoption in China, particularly as a leading player in the AI sector. Alibaba’s competitive advantages in cloud infrastructure, proprietary models, and versatile applications across various use cases make it a standout contender. The company’s AI models are noted for their robust multilingual capabilities and ability to support both cloud and edge devices. Despite recent stock price increases, Alibaba’s shares are still trading at a reasonable valuation compared to global peers, presenting further upside potential. Positive developments in tariff issues or macroeconomic improvements could also enhance this potential.
In another report released yesterday, Citi also maintained a Buy rating on the stock with a $170.00 price target.