Alibaba Group: Benchmark Keeps Buy Rating, Raises PT to $195 from $176.

Alibaba Group: Benchmark Keeps Buy Rating, Raises PT to $195 from $176.

Benchmark Securities has maintained its Buy rating on Alibaba Group (NYSE:BABA) while raising its price target to $195 from $176. This decision comes amidst a period of robust growth and strategic initiatives by Alibaba, particularly in the cloud and AI sectors.

Benchmark's analysts attribute the upward revision to Alibaba's impressive cloud revenue growth, which accelerated to 26% year-over-year (YoY) in the most recent quarter, exceeding market expectations. This growth is driven by strong adoption of AI products and increased capital expenditure, with AI-related revenues growing by triple digits for eight consecutive quarters. Alibaba's commitment to its three-year capital expenditure plan of RMB380 billion underscores its strategic focus on these areas.

In addition to the cloud and AI growth, Alibaba reported a 10% YoY increase in revenue for the first quarter of 2025, driven by substantial investments in artificial intelligence and cloud infrastructure. Despite a decline in adjusted EBITDA and free cash flow outflow, analysts have responded with mixed views. Bernstein raised its price target to $160, maintaining an Outperform rating, while Goldman Sachs increased its target to $163, keeping a Buy rating but projecting higher losses for Alibaba’s quick commerce business. JPMorgan raised its target to $170, maintaining an Overweight rating and expressing optimism about Alibaba’s food delivery and quick commerce operations.

The recent filings with the SEC also show significant changes in institutional holdings. Retirement Planning Co of New England Inc. increased its stake in Alibaba by 69.2% during the first quarter, now holding 17,445 shares valued at approximately $2.31 million. American Century Companies Inc. lifted its position by 52.1%, and Causeway Capital Management LLC increased its stake by 42.6%.

Benchmark's decision reflects a positive outlook on Alibaba's growth prospects, despite the mixed analyst ratings and recent downward adjustments by some firms. The company's strategic investments and operational challenges continue to shape its financial trajectory, with a focus on navigating these challenges while leveraging its strengths in cloud and AI.

References:
[1] https://www.investing.com/news/analyst-ratings/bofa-securities-raises-alibaba-stock-price-target-to-152-on-cloud-growth-93CH-4218064
[2] https://www.marketbeat.com/instant-alerts/filing-retirement-planning-co-of-new-england-inc-has-231-million-stake-in-alibaba-group-holding-limited-baba-2025-08-31/
[3] https://www.marketbeat.com/instant-alerts/filing-hhlr-advisors-ltd-has-51672-million-stake-in-alibaba-group-holding-limited-baba-2025-09-01/