Alibaba Group Holding (BABA) Rated as a Buy at Benchmark amid Food Delivery Investments

Alibaba Group Holding Ltd (NYSE:BABA) is one of the top AI stocks with huge upside potential. On July 21, research firm Benchmark reiterated a Buy rating on the stock and a $176 price target. The bullish stance follows a series of investments the company has made to strengthen its food delivery business.

While the investments are likely to trigger near-term margin pressure, they should counter JD.com’s entry and pressure in the segment. According to Benchmark, Alibaba is in a strong financial position to scale its operations and adapt to any market changes.

Consequently, the firm maintains that the recent market pullback presents a buying opportunity. That’s because Alibaba’s position as a leader in GenAI and cloud infrastructure remains unchanged. In addition, the company’s long-term prospects remain intact as it continues to reposition its e-commerce strategy through a more integrated retail ecosystem.

Alibaba Group Holding Ltd (NYSE:BABA) is a Chinese technology company best known for its e-commerce platforms. Its Artificial Intelligence and data intelligence units streamline the use of data and optimize scenarios to power new retail. It also boasts AI-driven innovations, including personalized shopping recommendations, smart logistics, AI-powered customer service, fraud detection, and intelligent business analytics.

While we acknowledge the potential of BABA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.