Alibaba Eyes Big Comeback: Analysts See 55% Upside on AI Momentum
Warning! GuruFocus has detected 3 Warning Signs with BABA.
The company is moving ahead with plans to spend 380 billion yuan (US$53 billion) over three years to expand its computing capacity and support AI-related services. That investment, alongside renewed institutional backing, has boosted market confidence.
Bridgewater Associates recently raised its position in Alibaba, signaling increased investor interest. Meanwhile, several analysts forecast up to 40% upside from current levels.
In fiscal Q4 2025, cloud revenue rose 18% year over year to RMB30.1 billion, driven by strong demand for AI products. The company said AI-related sales posted triple-digit growth for a seventh straight quarter, though exact figures were not disclosed.
E-commerce units also showed steady performance. Sales from the Taobao and Tmall Group climbed 9%, while customer management revenue, which includes advertising and seller services, rose 12%.
Macquarie analyst Ellie Jiang maintained an Outperform rating and $187.50 price target following a company visit, which implies 55% upside. Jiang said recent price cuts in logistics are likely a short-term move to remain competitive, while higher ad and service revenues may support margins going forward.
She added that corporate interest in Alibaba's AI offerings could further lift cloud revenue, and the company's long-term tech roadmap appears to be on track.
Based on the one year price targets offered by 38 analysts, the average target price for Alibaba Group Holding Ltd is $159.87 with a high estimate of $189.12 and a low estimate of $101.92. The average target implies a upside of +32.86% from the current price of $120.33.
Based on GuruFocus estimates, the estimated GF Value for Alibaba Group Holding Ltd in one year is $110.65, suggesting a downside of -8.04% from the current price of $120.33.
This article first appeared on GuruFocus.
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