Alibaba (BABA) stock has gained over 37% in the past year, lifted by rising momentum in AI-powered cloud services and booming instant delivery demand. Yet, despite the strong rally, several top analysts have recently lowered their price targets, citing short-term margin pressure as the company ramps up investment.
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Over the past week, five analysts, including Jefferies, Morgan Stanley, and Macquarie, have each trimmed their price targets on Alibaba, even as they all maintain Buy ratings. This reflects Wall Street’s continued belief in Alibaba’s long-term upside, despite expectations that Q1 FY26 earnings may take a hit due to rising spending.
Growth Remains Strong, but Analysts Warn on Margin Pressure
Jefferies analyst Thomas Chong recently lowered his price target to $150, pointing to a 15% EBITA decline in the June quarter, mainly due to heavy investment in logistics and delivery. Still, he sees 23% growth in cloud revenue and strong order activity, including a record 80 million daily orders across Taobao Instant Commerce and Eleme.
Similarly, Macquarie analyst Ellie Jiang, who slashed her target from $171.50 to $139, noted that the ongoing price war in China’s instant delivery market continues to drag on core e-commerce margins. However, she also pointed to cost optimizations in Alibaba’s global business and a boost from June 18 shopping festival promotions as partial offsets.
Morgan Stanley analyst Gary Yu joined the chorus, lowering his price target from $180 to $150 per share. He expects operating profit to decline by 16% in the June quarter, with a steeper 20% drop in the company’s core e-commerce and local services segments. Even so, Yu reiterated his Overweight rating, calling Alibaba the top AI enabler in China, ahead of peers like Meituan and JD.com (JD).
Is Alibaba Stock a Good Buy Right Now?
Analysts remain highly bullish about Alibaba’s stock trajectory. With 14 Buy ratings and one Hold rating, BABA stock commands a Strong Buy consensus rating on TipRanks. Also, the average Alibaba price target of $154.81 implies about 45% upside potential from current levels.
The Bottom Line
Despite multiple target cuts, analysts are still bullish on Alibaba. The stock’s fundamentals, particularly in cloud, AI, and instant commerce, remain strong. But with major investments ramping up, margins remain under pressure.
Investors will closely watch the upcoming Q1 FY26 earnings call for signals on when rising costs might ease and margins can bounce back.