Zhi Tong Cai Jing·2026-01-09 07:12Core Viewpoint - Morgan Stanley maintains an optimistic outlook on Alibaba's (09988) trading prospects over the next 6 to 12 months, recommending an "overweight" rating on the stock, anticipating that the share price will overcome short-term profit pressures and be re-rated once the monetization point of "cloud business + generative AI" becomes clearer [1] Group 1 - Morgan Stanley believes that the risk and reward profile for Alibaba leans towards the upside, as the potential of AI-driven cloud business and the value of platform optionality outweigh short-term investment hurdles [1] - The firm has lowered its target price for Alibaba's U.S. stock from $230 to $215, based on a 16x price-to-earnings ratio for the fiscal year 2028, and reduced the target price for its Hong Kong stock from HKD 225 to HKD 210 [1] - Despite increased investments in food delivery, instant retail, and user acquisition for generative AI native applications potentially weakening profit margins in the short term, these adverse factors are gradually being understood by the market, with investment pace largely dependent on management's self-regulation [1] Group 2 - Morgan Stanley has revised its earnings per share forecasts for Alibaba for 2027 to 2028 down by 15% and 7% respectively, reflecting increased investment in food delivery, instant retail, and generative AI user acquisition, as well as weakened monetization capabilities in the domestic e-commerce sector amid soft consumer demand [2] - The firm anticipates that as these adverse factors continue to unfold over the coming quarters, profitability may have further downside potential, leading to a more differentiated and potentially volatile trading style [2]