Alibaba’s stock price experienced a roller coaster today! In the early trading session, the e-commerce giant’s shares dropped over 5% to a low of HKD 156.1, but later saw some stabilization, currently reported at HKD 156.3, with a reduced decline of 5.5%. Trading volume was quite active, reaching HKD 27.169 billion, indicating that market interest in this stock remains high.
The entire tech sector faced pressure today, with the Hong Kong AI sector underperforming; of the 42 component stocks, only three rose, while the rest fell. As one of the representatives of AI concept stocks, Alibaba couldn’t escape this trend. Xiaomi Group was hit even harder, plummeting over 8% and leading the downturn in the sector.
Interestingly, despite today’s poor stock performance, major investment banks maintain a positive outlook on Alibaba’s prospects. CCB International recently published a report keeping Alibaba’s Hong Kong stock target at HKD 200.7 and rated it as ‘Outperform’. They are particularly optimistic about the growth potential of Alibaba Cloud, believing that strong AI demand will drive continuous development in the cloud business. Morgan Stanley also reiterated a ‘Buy’ rating, predicting a 32% increase in cloud revenue next financial quarter. Nomura even raised its target price to USD 215, suggesting that losses in the instant retail business may have peaked.
Investment banks generally forecast that Alibaba will record a 3.5% year-on-year revenue growth in the September quarter, reaching RMB 254 billion. Customer management revenue growth is expected to accelerate to 30%. While aggressive investments in fast-moving consumer goods and AI may impact short-term profitability, these investments will help Alibaba solidify its competitive edge in the AI era in the long run.
Analysts at CMB International directly stated that Alibaba is one of the major beneficiaries of the AI theme, with instant retail losses having peaked. CICC also maintains a target price of RMB 197 and is optimistic about the accelerated growth of the cloud computing business.
Ultimately, today’s decline may be more influenced by overall market sentiment and uncertainties regarding trade tariffs. After all, fluctuations in the U.S. market and changes in tariff policies can exert short-term pressure on tech stocks. However, if you believe in Alibaba’s long-term value and its AI transformation story, this pullback might actually represent an opportunity.
Investing carries risks, so please approach the market with caution. What are your thoughts on Alibaba’s performance today? Feel free to share your views in the comments!
