Alibaba (NYSE:BABA) shares have made a significant comeback, reaching levels last seen over three years ago. The stock has surged 41% this year, largely driven by the announcement of its latest large language model, Qwen 2.5. Analyst Alex Yao from J.P. Morgan believes Alibaba’s strengths in cloud computing, generative AI, and e-commerce will drive future growth.
Yao points to three key factors that could boost the stock price: AliCloud’s undervaluation compared to its peers, increasing consumption of AI features, and improving fundamentals in domestic e-commerce. He projects 10% growth in AliCloud revenue by FY26 and a positive earnings revision due to these improvements.
The analyst maintains an Overweight (i.e., Buy) on Alibaba shares, with a $125 price target. His colleagues also overwhelmingly support the stock, with a Strong Buy consensus rating and an average target of $121.83. Despite the recent surge, investors may still find attractive valuations in Alibaba shares.
Source: https://www.tipranks.com/news/article/alibaba-is-our-favorite-chinese-internet-stock-says-j-p-morgan