Alibaba's recent stock decline, despite a significant year-over-year net profit increase of 279% to RMB 12.382 billion in Q4 FY2025, has raised questions about its investment potential. The dip was primarily due to revenue falling short of market expectations—reporting RMB 236.45 billion against the anticipated RMB 237.91 billion—leading to an over 5% drop in share value.
Analyst Perspectives and Price Targets
Despite the revenue miss, several analysts maintain a positive outlook on Alibaba's stock:
Morgan Stanley has reaffirmed its "Overweight" rating with a price target of $180, citing confidence in Alibaba's core commerce growth and anticipated acceleration in its cloud segment.
Barclays also maintains an "Overweight" rating with a $180 target, highlighting Alibaba's strategic positioning in China's AI infrastructure.
Citi has reiterated a "Buy" rating with a $169 target, emphasizing the company's focus on AI advancements and technological innovation.
Investment Considerations
The current pullback may present a buying opportunity for investors with a long-term perspective. Alibaba's ongoing investments in cloud computing and AI, coupled with supportive macroeconomic factors like easing U.S.-China trade tensions, bolster its growth prospects.
However, investors should remain cognizant of potential risks, including regulatory challenges and market volatility. While the stock has demonstrated resilience, achieving the $180 price target will depend on Alibaba's ability to meet growth expectations in its core and emerging business segments.
In summary, while there are risks to consider, the current valuation, combined with positive analyst sentiment and strategic initiatives, suggests that Alibaba's stock may offer a favorable risk-reward profile for investors seeking exposure to China's technology sector.
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