Chinese e-commerce giant Alibaba (BABA) stock has rallied over 35% in the past year, supported by growing momentum in cloud services and e-commerce. Ahead of its upcoming June-quarter earnings, Jefferies’ Top analyst Thomas Chong has lowered his price target for the second time in less than two weeks. This time, he reduced it from $153 to $150 in his July 9 note, citing near-term margin pressure from increased investment in logistics and instant commerce. The previous cut came on June 30.
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Despite these downward revisions, the 4-star analyst maintains a Buy rating on the stock. Chong continues to back Alibaba’s long-term growth story, driven by accelerating AI-led cloud revenue and record-breaking order volume across its instant commerce platforms.
Chong’s Views on Alibaba
Chong sees Alibaba’s cloud business as a key growth driver, forecasting 23% year-over-year revenue growth for the Cloud Intelligent Group in the June quarter, up from his earlier 20% estimate. This uptick is fueled by rising enterprise demand for AI solutions, which continues to lift cloud adoption.
On the commerce front, Chong pointed to record order volumes across Taobao Instant Commerce and Eleme, which surpassed 80 million daily orders on July 5, including over 13 million non-meal orders. He views this as evidence that Alibaba’s investment in fast delivery is starting to show results.
Chong also expects Alibaba’s advertising and merchant service revenue to grow by about 10.5% year-over-year, slightly ahead of his earlier forecast. He believes this part of the business will grow faster than overall sales, helped by better monetization tools and higher service fees charged to sellers.
Profitability Pressures Remain in Focus
That said, near-term profitability remains under pressure. For the June 2025 quarter, Chong forecasts a 15% decline in overall EBITA to RMB 38 billion, with margins falling to 15%, below market expectations. Within the Taobao Tmall Group (TTG)—now integrated with Eleme and OTA Fliggy—EBITA is expected to drop about 20%, reflecting higher spending on local services and logistics.
Still, Jefferies maintains a positive outlook, noting that the market has likely priced in most of these costs. The firm expects Alibaba to address several key topics on its upcoming earnings call, including AI cloud momentum, daily active user trends, and updates on shareholder returns.
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 $159.67 implies about 50% upside potential from current levels.
