Benchmark Maintains Buy Rating on Alibaba (BABA) Stock, Cuts PT

On May 16, Benchmark lowered the price target on Alibaba from $190 to $176, keeping a Buy rating on the stock.

Analyst Fawne Jiang adjusted the price target as Alibaba Group Holding Limited (NYSE:BABA) missed both earnings and revenue estimates during Q4 FY2025. The company missed targets due to weak performance in Alibaba's AIDC division and outdated consensus estimates.

Despite the underperformance, Jiang remains optimistic regarding BABA's core commerce and cloud computing segments, which performed extremely well during Q4. The company experienced a 10% revenue and 26% EBITDA growth from a year ago. Alibaba’s Cloud revenue soared by 18% during Q4 FY2025, with AI-related product revenue growing by triple-digit for the seventh straight quarter.

Under the QN family, Alibaba has open-sourced over 200 models with almost 300 million downloads globally. This demonstrates the Chinese giant’s growing dominance in AI technology. Jiang projects Customer Management Revenue (CMR) to outperform Gross Merchandise Value (GMV) growth through FY2026, driven by sustained gains in take rates.

Alibaba Group Holding Limited (NYSE:BABA) is a leading Chinese e-commerce platform. It is a diversified company with a major share in cloud services and a growing presence in Gen AI.

While we acknowledge the potential of BABA to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than BABA and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure. None.