Alibaba Group Holding Limited (NYSE:BABA) is one of the AI Stocks Investors Are Watching Closely. On September 2, Benchmark analyst Fawne Jiang raised the price target on the stock to $195.00 (from $176.00) while maintaining a Buy rating.
Jiang noted how Alibaba missed its first-quarter fiscal 2026 headline consensus expectations due to partially-accounted for asset divestitures including SunArt and Intime, and increased investment in Quick Commerce, which pressured margins.
However, Alibaba’s cloud and ecommerce segments are gaining strength, with cloud delivering a solid beat and guidance pointing toward further acceleration. These aspects reinforce the company’s position as a leading GenAI and cloud infrastructure provider.
“BABA missed F1Q26 headline consensus, largely due to some revenue estimates that didn’t fully factor in asset divestitures (SunArt, Intime) and a sharp uptick in investment toward Quick Commerce, which pressured margins. However, we believe fundamentals are clearly strengthening across its cloud and e-commerce segments. Cloud delivered a solid beat with +26% y/y growth and guided to further acceleration, marking a notable upward revision and reinforcing BABA’s position as China’s leading GenAI and cloud infrastructure provider.”
“In e-commerce, while Quick Commerce impacted margins (~RMB10B in F1Q26, ~RMB50B for FY26), we view it as having strategic potential to be accretive, expanding long term GMV TAM (~RMB1TN guidance), driving user traffic, and supporting long-term ad revenue upside. As a result, we have raised our FY26/FY27 growth forecasts and see potential for market share gains. With these tailwinds, we also see room for multiple expansion and raise our price target to $195.”
Alibaba Group Holding Limited (NYSE:BABA) is an internet giant that offers e-commerce services in China and internationally.
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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