Alibaba (BABA) Earns $195 Price Target as AI and Cloud Demand Accelerate

Alibaba Group Holding Limited (NYSE:BABA) is one of the AI Stocks on the Market’s Radar. On Nov 26, Benchmark reiterated its Buy rating on the stock with a $195.00 price target.  The firm is cautiously optimistic on the stock based on cloud strength and AI demand, albeit execution risks remain.

The firm highlighted how Alibaba has delivered strong cloud performance, with 34% year-over-year growth in its cloud segment. Meanwhile, Customer Management Revenue (CMR) increased 10% year-over-year, in line with expectations, while adj EBITDA was slightly below sell-side forecasts but aligned largely with buy-side views.

Firm analysts discussed company management’s emphasis on robust AI-cloud demand that continues to outpace supply. This is driven by “broad-based cloud and AI adoption across enterprises, reinforcing a multi-year sustainable cloud growth outlook, an incremental positive for us.”

Despite these positives, some model uncertainty remains because the company hasn’t provided directional cloud guidance and also highlighted some CMR slowdown.

Quick commerce losses have been sizable and while the segment is a core pillar, its nature is dynamic which implies fluctuations in quarterly profitability.

“Quick commerce losses were sizable (RMB 3B+ in F2Q), though UE losses are on track improving 50%+ q/q heading into F3Q, and while QC remains a core strategic pillar, implying continued investment, its dynamic nature means quarterly profitability will fluctuate.”

Alibaba Group Holding Limited (NYSE:BABA) is an internet giant that offers e-commerce services in China and internationally.

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