Chinese e-commerce giant Alibaba (BABA) is set to report its Q1 FY26 earnings on August 29, and Wall Street analysts remain bullish on Alibaba stock, projecting over 20% upside from current levels. Analysts expect Alibaba to report earnings of $2.06 per share on revenues of $35.35 billion in Q1. The stock has already jumped over 47% year-to-date, fueled by strength in its AI-driven cloud business and growing momentum in fast delivery services. Looking ahead, analysts expect solid top-line growth in the first quarter, though profit margins may face some pressure due to ongoing investments.
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At the same time, Alibaba has also been making strategic moves outside its core business. Just last week, the Hong Kong Stock Exchange gave initial approval for the company to spin off its autonomous driving unit, Banma Network Technology, through an IPO. After the offering, Alibaba’s stake in Banma will fall from roughly 44.7% to about 30%, allowing Banma to operate more independently and giving investors a clearer view of its business.
Fang’s Take on BABA Stock
About 92% of Wall Street analysts remain bullish on Alibaba’s fundamentals, highlighting steady consumer demand. However, many analysts have trimmed their price targets recently due to concerns over shrinking profit margins as Alibaba ramps up spending to stay competitive.
Late last month, Top-rated Mizuho analyst Wei Fang cut his price target from $160 to $149, pointing to rising margin pressure. He noted that competition in China’s local commerce space, especially in food delivery and quick retail, is starting to weigh on profits.
Fang expects Q1 margins to fall sharply from the prior quarter. He also warned that margin strain could persist through 2025 and into 2026 unless regulators step in to ease the pricing war. As a result, Mizuho lowered its Q1 EBITDA forecast from RMB 55 billion to RMB 45 billion and cut its FY27 EBITDA projection to RMB 231 billion.
Is Alibaba Stock a Good Buy Right Now?
Analysts remain highly bullish about Alibaba’s stock trajectory. With 12 Buy ratings and one Hold rating, BABA stock commands a Strong Buy consensus rating on TipRanks. Also, the average Alibaba price target of $148.55 implies about 20.83% upside potential from current levels.
