Alibaba (BABA) reported weaker-than-expected Q4 FY26 results yesterday. While Alibaba’s core profitability fell sharply, with adjusted EBITA down 84% year-over-year to 5.1 billion yuan due to heavy AI and e-commerce spending, Wall Street analysts remained upbeat about the company’s fast-growing cloud and AI business. Following the earnings release yesterday, several firms have raised their price targets on the stock.
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For context, Alibaba operates China’s largest e-commerce platforms while also expanding rapidly in cloud computing and artificial intelligence services.
Analysts Turn More Bullish on Alibaba’s AI Business
Following the earnings Q4 print, Deutsche Bank analyst Peter Milliken raised his price target on Alibaba stock to $195 from $185 while maintaining a Buy rating. The 4-star analyst pointed to improving monetization at Taobao and Tmall, along with accelerating cloud growth.
Importantly, Alibaba’s external cloud revenue rose 40% year-over-year, while AI-related revenue continued growing at triple-digit rates. Milliken also highlighted management’s guidance that MaaS (Model-as-a-Service) annual recurring revenue could rise from 8 billion yuan currently to 30 billion yuan by the end of the year.
Likewise, Morgan Stanley analyst Gary Yu raised his price target on BABA stock to $190 from $180 while maintaining an Overweight rating. Yu noted that AI revenue reached 9 billion yuan during the quarter and now accounts for roughly 30% of Alibaba’s external cloud revenue.
The analyst also expects cloud margins to improve over the next few quarters as higher-margin AI services continue growing. However, Yu noted that losses tied to AI model training, quick commerce, and app investments remain key areas investors are watching closely.
Is Alibaba Stock a Buy Now?
Wall Street remains constructive on the stock. Alibaba stock carries a Strong Buy consensus rating based on 15 Buy ratings and two Holds over the past three months. The average BABA price target stands at $186.32, suggesting roughly 30.35% upside from current levels.
