Alibaba (BABA) stock has gained 55% over the past year, but Benchmark’s Top analyst Fawne Jiang believes there’s still plenty of upside ahead. She has reiterated her Buy rating with a $176 price target, implying a 46% gain from current levels.
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Jiang, a five-star analyst, acknowledged that near-term profits could come under pressure due to increased spending. Still, she sees recent share weakness as a “buying opportunity” and encourages investors to “build exposure on dips,” confident in Alibaba’s strong long-term growth outlook.
BABA’s Core E-Commerce Business Shows Strength
Jiang sees strength in Alibaba’s main e-commerce business. She expects solid growth in customer management revenue, helped by better ad tools and service fee updates. She also anticipates that gross merchandise volume (GMV) will rise in line with broader industry trends.
In another development, Alibaba recently combined its Ele.me and Fliggy platforms under its main e-commerce unit. Jiang believes this could help Alibaba build a more unified and efficient business, which may support long-term growth.
Short-Term Margins May Be Hit by Higher Spending
To protect its market share from rival JD.com (JD), Alibaba is ramping up investment in food delivery and instant retail. The company has announced plans to spend RMB 50 billion in these areas. Jiang warns that these heavy investments may squeeze profit margins in the short term.
As a result, Benchmark has cut its EBITDA forecast to RMB44 billion for Q1 FY26 and RMB208 billion for the full FY26, “reflecting near-term margin pressure.”
Cloud and AI Remain Growth Drivers
Despite these short-term pressures, Jiang continues to view Alibaba’s cloud and AI businesses as key long-term growth areas. She pointed to the upgraded Qwen AI model, now compatible with Apple (AAPL) devices, along with a new desktop chatbot that features image generation and coding capabilities.
In addition, Alibaba Cloud has grown its global reach by opening new data centers in South Korea, Mexico, and Thailand, reflecting its push to expand overseas.
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 $151.81 implies about 26.22% upside potential from current levels.
