Alibaba (BABA) Earns $195 Price Target as AI and Cloud Demand Accelerate

Core Viewpoint - Alibaba Group Holding Limited is recognized as a significant player in the AI stock market, with Benchmark maintaining a Buy rating and a price target of $195.00, driven by cloud strength and AI demand despite execution risks [1] Group 1: Financial Performance - Alibaba's cloud segment has shown strong performance, achieving a 34% year-over-year growth [2] - Customer Management Revenue (CMR) increased by 10% year-over-year, aligning with expectations, while adjusted EBITDA was slightly below sell-side forecasts but consistent with buy-side views [2] Group 2: Market Dynamics - Analysts noted that the demand for AI-cloud services is robust and continues to exceed supply, indicating a sustainable growth outlook for the cloud sector [3] - There is some uncertainty in models due to the lack of directional cloud guidance from the company and a noted slowdown in CMR [3] Group 3: Quick Commerce Segment - Quick commerce losses have been significant, exceeding RMB 3 billion in the second fiscal quarter, but user engagement losses are improving by over 50% quarter-over-quarter heading into the third fiscal quarter [4] - The quick commerce segment remains a core strategic pillar for Alibaba, suggesting ongoing investment, though its dynamic nature may lead to fluctuations in quarterly profitability [4]