Why Jefferies Still Sees Alibaba Group Holding Limited (BABA) as a Compelling Buy for 2026

We recently published an article titled 12 High Growth E-commerce Stocks To Buy. 

Jefferies analyst Thomas Chong lowered the firm’s price target on Alibaba Group Holding Limited (NYSE:BABA) to $225 from $231 while maintaining a Buy rating on the shares as part of an earnings preview on January 8. Despite the modest adjustment, Jefferies reaffirmed Alibaba as a top pick for 2026, highlighting the company’s expanding opportunities in artificial intelligence and cloud computing. The analyst also noted that Alibaba Group Holding Limited (NYSE:BABA) is expected to continue making steady progress in quick commerce during the December quarter, supported by improving execution across key operating metrics.

The company’s underlying fundamentals reinforce this positive long-term view. For the second quarter of fiscal 2026, Alibaba Group Holding Limited (NYSE:BABA) reported a 15% year-over-year increase in total revenue, excluding Sun Art and Intime. Growth was driven by a 10% increase in China e-commerce Customer Management Revenue and a strong 34% rise in Cloud Intelligence revenue. Notably, AI-related product revenues grew at a triple-digit pace for the ninth consecutive quarter, with external customer revenue accelerating by 29%, underscoring the increasing monetization of Alibaba’s AI and cloud capabilities.

Founded in 1999 and headquartered in Hangzhou, China, Alibaba Group Holding Limited (NYSE:BABA) operates one of the world’s largest digital commerce and cloud ecosystems. Through Alibaba.com, the company connects U.S. businesses with more than 40 million global B2B buyers, while its broader platform spans e-commerce, logistics, cloud computing, and AI-driven services.

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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