Analysts are expressing increasing optimism regarding Alibaba’s financial future, largely fueled by the unfolding advancements in artificial intelligence (AI). Bernstein recently updated its assessment of Alibaba by elevating its rating from “market perform” to “outperform,” alongside adjusting the price target significantly higher by $61, bringing it to $165. This revision suggests a possible upside of approximately 23.1% based on the stock’s value at Tuesday’s close. This surge in bullish sentiment can be credited not only to the recent robust performance of Alibaba’s shares, which skyrocketed over 50% in the preceding month, but also to external market dynamics introduced by competing entities in the AI landscape.
The dramatic ascent of Alibaba’s stock can also be attributed to heightened competition instigated by developments from startups like Deepseek, which introduced a low-cost, open-source AI model in January. This innovation sent shockwaves through American tech stocks, raising concerns about budgets and investments in the burgeoning AI sector. On the other hand, Alibaba responded strategically by announcing that its video generation AI models would be freely available to the public, aligning its offerings with the open-source trend initiated by Deepseek. This move not only positions Alibaba favorably in the competitive arena but also reinforces its commitment to fostering innovation within the tech community.
Analyst Robin Zhu from Bernstein is particularly bullish about Alibaba’s long-term trajectory, emphasizing that the prevalent enthusiasm for AI will catalyze further growth. This positive outlook comes on the heels of Alibaba’s impressive fourth-quarter earnings report, which contributed to the heightened stock valuation. In a detailed commentary, Zhu pointed out that despite the recent enthusiasm peaking, the confluence of enhanced capital allocation towards AI infrastructure and a more favorable industry setting compared to traditional cloud services could indicate a transformative upward path for Alibaba’s earnings.
Zhu anticipates a significant acceleration in revenue from Alibaba’s cloud computing segment, known as Alicloud, during the first half of 2025. He envisions that as the company discloses more nuanced details regarding its AI growth strategies, investor confidence will remain high, with many likely buying into the stock during market dips. This sentiment is reflective of a broader consensus in Wall Street, where an overwhelming majority—39 out of 44 analysts—maintain a strong buy or buy stance regarding Alibaba’s stock, showcasing a collective confidence in the tech giant’s market positioning.
The confluence of AI advancements, strategic shifts in product offerings, and strong analytical support creates a compelling case for Alibaba’s stock as an attractive investment opportunity. As the company capitalizes on the AI boom and the growing demand for cloud solutions, it is poised to not only recover but thrive in an increasingly competitive sector. With a consensus target of $150—indicating a notable upside from current levels—investors are encouraged to keep a close watch on Alibaba as it navigates this transformative era in technology.