Jefferies Maintains Buy Rating on Alibaba, Cuts Price Target to $150 Ahead of Earnings.

Jefferies maintains Buy rating on Alibaba but lowers price target to $150 from $153 ahead of quarterly earnings. Analysts led by Thomas Chong provided a preview of the company's performance, with the quarterly results set to be released next month. The rating is based on Alibaba's strong e-commerce business and growing cloud computing segment.

Jefferies has maintained its Buy rating on Alibaba Group Holding Limited (BABA) but has lowered its price target to $150 from $153 ahead of the company's upcoming quarterly earnings. The rating is based on Alibaba's strong e-commerce business and growing cloud computing segment. The analysts, led by Thomas Chong, provided a preview of the company's performance, with the quarterly results set to be released next month.

Alibaba has been transforming its business model by focusing on artificial intelligence (AI) and cloud computing, which has positioned the company for sustained growth. The company's strategic investments in AI infrastructure and partnerships with device manufacturers such as HONOR have created new monetization pathways and expanded its technological influence beyond traditional e-commerce [1].

The company's commitment to invest RMB 380 billion over three years in AI infrastructure demonstrates its confidence in this strategic direction. The widespread adoption of Alibaba's Qwen3 language model across various platforms, including Xiaomi's AI assistant and multiple smartphone manufacturers, validates the commercial viability of this approach [1].

Alibaba's cloud division has shown accelerating revenue growth driven by surging AI demand, reinforcing the strategic value of this transformation. The company's open-source methodology has resulted in remarkable results, with more than 300 million global downloads and 100,000 derivative models establishing Qwen as the world's largest open-source AI family [1].

Despite the challenges posed by the food delivery market, Alibaba's core e-commerce platforms have demonstrated resilient user engagement and improving monetization efficiency through AI-enhanced recommendations and operational optimization. The company's strategic international partnerships and targeted logistics investments provide supplementary growth channels that complement the primary AI-driven transformation [1].

Jefferies expects Alibaba's strong e-commerce business and growing cloud computing segment to continue driving growth. The company's AI ecosystem development and cloud infrastructure investments position it advantageously for long-term value creation in China's evolving digital economy. Investors should hold existing Alibaba positions or wait for better entry points, considering the company's strategic transformation and growth prospects [1].

References:
[1] https://www.nasdaq.com/articles/alibaba-vs-jdcom-which-chinese-e-commerce-stock-has-better-upside