Alibaba (BABA) stock has climbed more than 84% year-to-date, driven by strong gains in its AI cloud unit and growing demand for fast delivery services. The Chinese e-commerce giant will report its Q2 FY26 earnings on November 25. Ahead of the print, TipRanks’ AI Analyst Rina Curatex (under the OpenAI-4o model) cut the rating to Neutral from Buy and reduced the price target to $176 from $205, leaving only about 8.23% upside. In contrast, Wall Street still sees more room to run, with the average target price pointing to almost 24% upside.
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According to TipRanks A.I. Stock Analysis, Alibaba stock earns a score of 69 out of 100, reflecting strong financial performance, offset by “bearish technical indicators and valuation concerns.”
For context, TipRanks’ AI Stock Analysis delivers automated, data-driven evaluations of stocks based on key performance metrics, giving investors a clear and concise snapshot of a stock’s potential. Moreover, TipRanks’ A.I.-driven rating combines insights from multiple models, including OpenAI’s (PC:OPAIQ) GPT-4o and Google’s (GOOGL) Gemini, to offer investors a clearer view of a stock’s potential.
AI Analyst Weighs BABA’s Strengths and Risks
The analysis points out both positive and negative factors that affect the company’s outlook.
On the positive side, Alibaba continues to gain from growth in AI and cloud services, which is boosting its position in fast-growing tech areas. The company’s Q1 FY26 results showed solid momentum, with revenue reaching 247.7 billion yuan ($34.6 billion) and cloud sales climbing 26% year-over-year to 33.4 billion yuan. Meanwhile, Alibaba’s strategic partnerships, such as its collaboration with SAP, are also expanding its global reach.
However, the analysis also highlights some challenges. Weak free cash flow, driven by high spending, could limit Alibaba’s flexibility in the near term. The quick-commerce business is still losing money, reflecting strong competition in fast delivery and related services. These issues may keep pressure on margins and slow earnings growth. Rising debt is another concern, as it could increase financial risk for the company if not handled well.
Is Alibaba Stock a Good Buy Right Now?
Analysts remain highly bullish about Alibaba’s stock trajectory. With 19 Buy ratings and two Hold ratings, BABA stock commands a Strong Buy consensus rating on TipRanks. Also, the average Alibaba price target of $198.21 implies about 24.01% upside potential from current levels.
