Alibaba (BABA) remains a “Top Pick” at Morgan Stanley after the company unveiled its new XuanTie C950 AI chip, which is more than three times faster than its earlier version. The firm’s analyst, Gary Yu, reiterated an Overweight rating and set a $180 price target, pointing to Alibaba’s growing strength in artificial intelligence.
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Why the Analyst Is Bullish on Alibaba Stock
Yu said the new chip strengthens his positive view on Alibaba. He believes the company now has strong control over key parts of AI. The company now designs its own chips through its T-Head unit. This helps it rely less on outside suppliers and manage costs better. It also allows the company to scale faster when demand rises and reduces risks from U.S. export rules.
Morgan Stanley also pointed to Alibaba’s full AI setup as a key strength. The company brings together chips, cloud, models, and applications. Alibaba Cloud provides the computing power, while its Qwen models and apps support wider use.
Yu added that tools like Wukong and the Alibaba Token Hub could help turn AI into revenue over time by expanding use across businesses and consumers.
The firm values the T-Head unit between $28 billion and $86 billion, or about $22 per share, as part of its broader $245 valuation.
Is Alibaba Stock a Buy Now?
Wall Street remains constructive on the stock. Alibaba carries a Strong Buy consensus rating based on eight Buy ratings and one Hold over the past three months. The average BABA price target stands at $188.38, suggesting roughly 49.44% upside from current levels.
