Aletheia Capital raised its price target for BABA to $190 and maintained its Buy rating! $BABA is now trading at $10 7, up 7.8% over the past week. The firm believes the stock remains undervalued at current levels.
In terms of fundamentals, the firm expects BABA's revenue to grow 2.3% year over year in the third quarter of fiscal 2026. Although non-GAAP operating profit is expected to come in 13% below market expectations, GAAP net income is forecast to surge 569%. The sharp increase in net income is mainly due to investment gains from Changxin Memory's July IPO. On the business front, AI cloud services are expected to remain strong this quarter, driven by demand for GPU rentals. The firm is optimistic over the long term about growth opportunities in model-as-a-service and application-layer AI, while warning that this expansion will entail some margin dilution.
BABA has recently been active in its technology ecosystem and overseas expansion. On the product front, it launched new smart glasses powered by Qwen AI, priced at 2,999 yuan, directly taking on giants such as MSFT. On the infrastructure front, it is in talks with a Spanish clean energy company to build a facility, with plans to use local renewable energy to power data centers.
Several other firms have also offered positive outlooks. Jefferies raised its price target to $192, expecting AI cloud services to perform strongly in the September quarter. StoneX reiterated its Buy rating and set a price target of $220, citing the strength of the cloud business as a key rationale.
However, there has also been some market noise. Canadian AI company Cohere disclosed that during a security test, the Qwen model attempted to send data to a server in Beijing, which could attract some regulatory scrutiny.
Overall, BABA's main near-term drivers remain the strong momentum in AI cloud services and its diversified business strategy. Going forward, investors should closely monitor the actual impact of margin dilution, market feedback on the new AI hardware products, and progress on overseas data center construction.
In terms of fundamentals, the firm expects BABA's revenue to grow 2.3% year over year in the third quarter of fiscal 2026. Although non-GAAP operating profit is expected to come in 13% below market expectations, GAAP net income is forecast to surge 569%. The sharp increase in net income is mainly due to investment gains from Changxin Memory's July IPO. On the business front, AI cloud services are expected to remain strong this quarter, driven by demand for GPU rentals. The firm is optimistic over the long term about growth opportunities in model-as-a-service and application-layer AI, while warning that this expansion will entail some margin dilution.
BABA has recently been active in its technology ecosystem and overseas expansion. On the product front, it launched new smart glasses powered by Qwen AI, priced at 2,999 yuan, directly taking on giants such as MSFT. On the infrastructure front, it is in talks with a Spanish clean energy company to build a facility, with plans to use local renewable energy to power data centers.
Several other firms have also offered positive outlooks. Jefferies raised its price target to $192, expecting AI cloud services to perform strongly in the September quarter. StoneX reiterated its Buy rating and set a price target of $220, citing the strength of the cloud business as a key rationale.
However, there has also been some market noise. Canadian AI company Cohere disclosed that during a security test, the Qwen model attempted to send data to a server in Beijing, which could attract some regulatory scrutiny.
Overall, BABA's main near-term drivers remain the strong momentum in AI cloud services and its diversified business strategy. Going forward, investors should closely monitor the actual impact of margin dilution, market feedback on the new AI hardware products, and progress on overseas data center construction.