Chinese tech giant Alibaba (BABA) has been receiving several positive analyst reviews after reporting solid results for the December quarter, backed by a recovery in e-commerce growth and strength in cloud business due to AI (artificial intelligence) tailwinds. On Wednesday, Benchmark added BABA stock to its Best Ideas list, calling it China’s leading AI play and recommending it as a Top Pick for 2025.
Benchmark analyst Fawne Jiang reiterated a Buy rating on Alibaba stock with a price target of $190, reflecting about 37% upside potential. Despite the impressive 64% rally so far in 2025, the five-star analyst believes that BABA stock is still attractive at an FY26 P/E (Price/Earnings) multiple of 13x, which indicates a significant discount to stocks of global hyperscalers that are trading at the high-20 or low-30 range.
Jiang ranks 218 out of more than 9,400 analysts on TipRanks, with a success rate of 55% and an average return per rating of 16.1% over a one-year period.
Reasons Behind Benchmark’s Bullish Thesis for Alibaba Stock
Jiang sees the possibility for a structural re-rating of BABA stock this year, backed by fundamental improvement across its core businesses – e-commerce, cloud, and Alibaba International Digital Commerce (AIDC).
Specifically, Jiang expects Alibaba’s e-commerce growth to reaccelerate, driven by a rise in take rate. She also expects AIDC to achieve profitability in Fiscal 2026. The top-rated analyst sees the potential for an upward revision in earnings, driven by improvement in the core businesses, loss reduction in other segments, and continued divestment of non-core assets.
Further, the analyst expects the company to benefit from an acceleration in AI adoption in China due to the emergence of DeepSeek. Jiang believes that BABA has an edge over other companies due to competitive advantages in cloud infrastructure, proprietary models, versatility across various applications, and flexible edge device capabilities. The analyst also highlighted the attractiveness of Alibaba’s Qwen series models and solid multilingual capabilities, which make it a leading player in the global open-source AI space.
Additionally, Jiang pointed out that BABA’s models have the ability to support both cloud and edge devices. Also, Apple’s (AAPL) partnership with Alibaba could further boost the latter’s business. Apple is collaborating with Alibaba to introduce AI features in iPhones in China.
Is BABA Stock a Good Buy Right Now?
Despite the overhang of the U.S.-China trade war, Wall Street has a Strong Buy consensus rating on Alibaba stock based on 14 unanimous Buys. The average BABA stock price target of $165.41 implies about 19% upside potential from current levels.
