Bank of America Securities analyst Joyce Ju has reiterated their bullish stance on BABA stock, giving a Buy rating today.
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Joyce Ju’s rating is based on several positive developments within Alibaba’s business segments. The company’s cloud revenue is expected to accelerate in the upcoming quarters, driven by the gradual introduction of AI-related products. Despite some initial concerns about AI demand and capital expenditures, management’s reassurances about future growth and investment plans have helped alleviate these worries.
Additionally, Alibaba’s customer management revenue showed a 12% year-over-year growth, largely due to increased monetization efforts on platforms like Taobao. The company is also investing more in food delivery and insta-shopping, which is anticipated to boost app traffic and user engagement. These factors, along with the broader AI growth theme and potential consumer stimulus, underpin the Buy rating and the adjusted price objective of $145.