Hong Kong-listed Alibaba Group Holding Limited’s (HK:9988) stock is showing signs of recovery, rising approximately 26% year-to-date. Moving ahead, the stock remains poised for more growth driven by various factors like the Stock Connect program and share buybacks. Moreover, the stock has earned a favourable outlook from analysts, with a Strong Buy rating on TipRanks.
Alibaba is best known for its dominance in the online marketplace. Over time, it has broadened its portfolio to encompass cloud computing, digital entertainment, logistics, and financial services.
Key Factors Driving Alibaba Stock’s Growth
Alibaba’s Hong Kong shares are showing signs of recovery, rising approximately 26% year-to-date. After a sluggish phase, the stock picked up momentum following shareholder approval in August to upgrade its Hong Kong listing to primary status.
In addition, Alibaba’s shares joined the Stock Connect program in September, which links the Shenzhen and Shanghai stock exchanges with the Hong Kong exchange. This move opened the door to increased investment in Alibaba stock by making it more accessible to mainland Chinese investors.
Alibaba is also actively implementing its share buyback plan as part of a strategic approach to increase shareholder value. Last week, the company announced the repurchase of over 1.6 million shares on the New York Stock Exchange at an average price of approximately $12.23 per share.
Insights from TipRanks’ Bulls Say, Bears Say
TipRanks’ Bulls Say, Bears Say tool provides insights into analysts’ perspectives on Alibaba stock.
Bulls are optimistic about the company’s strong cloud revenue growth, driven by rising demand for public cloud services and AI-driven products. Additionally, analysts are bullish on Alibaba’s dominant position in the e-commerce industry and diversified business model. They highlight that international commerce is a key driver of Alibaba’s growth, with platforms like AliExpress and Lazada playing a significant role in its revenue generation.
On the other hand, bears are concerned about the financial performance of the company. In the short term, Alibaba’s earnings are expected to face pressure due to investments in new initiatives. Meanwhile, intense competition from players like PDD Holdings (PDD) is hurting the company’s market share.
Is Alibaba Stock a Good Buy Now?
On TipRanks, 9988 stock has received a Strong Buy rating based on seven Buys and one Hold recommendation from analysts. The Alibaba share price target is HK$125.75, which implies a growth rate of 33.8% on the current trading price.
