Alibaba's Stock Comeback Has More Room To Run, Say Analysts

Core Viewpoint - Alibaba Group's stock performance has improved due to strong growth in its cloud business and advancements in AI, despite concerns over U.S.-China tensions [1] Group 1: Financial Performance and Projections - Goldman Sachs raised Alibaba's capital expenditure forecast for fiscal 2026–2028 to 460 billion Chinese yuan, among the highest in the market, and increased cloud revenue growth projections to 31%, 38%, and 37% year-over-year for the next three fiscal years [3] - Analysts expect Alibaba's second-quarter fiscal 2026 revenue to rise 3.8% year-over-year to 245.5 billion Chinese yuan, with adjusted EBITA expected to fall 83% to 7.1 billion Chinese yuan [9] - CICC lowered its fiscal 2026 revenue forecast by 1% to 1.06 trillion Chinese yuan and revised adjusted net profit downward by 17% for 2026 to 101.2 billion Chinese yuan [13] Group 2: Cloud Business and AI Developments - Analysts highlighted Alibaba Cloud's growth and early profit recovery on Taobao and Tmall as key drivers behind the stock rebound [1] - Alibaba Cloud's revenue growth is projected to be 30% year-over-year in the second quarter of fiscal 2026, with an EBITA margin of 9% [9] - The firm noted that Alibaba unveiled new AI models and applications at its Apsara Conference, which are expected to drive sustained revenue and profit growth for the cloud unit [10] Group 3: Market Sentiment and Analyst Ratings - Goldman Sachs lifted its price forecast for Alibaba from $179 to $205, reflecting stronger visibility in e-commerce profitability and international cloud expansion [4] - Daiwa Securities reaffirmed its Buy rating despite projecting a relatively high EBITA loss of up to 35 billion Chinese yuan in the third quarter of fiscal 2026 [6][8] - CICC maintained an Outperform rating with a price forecast of $204, despite lowering its profit expectations due to expanded losses in flash purchase services [13]