Morgan Stanley and Jefferies Cut Price Targets on Alibaba (BABA)

Core Insights - Alibaba Group Holding Limited (NYSE:BABA) is recognized as one of the top 10 stocks to buy according to analysts, despite recent price target reductions by major firms [1] - Morgan Stanley has lowered its price target from $200 to $180 while maintaining an Overweight rating, citing a weaker outlook for the core e-commerce business [1][2] - Jefferies has also reduced its price target from $231 to $225 but continues to view Alibaba as a top pick for 2026, highlighting opportunities in AI and cloud services [2] E-commerce and Cloud Business - Morgan Stanley's analyst noted that the core e-commerce business is experiencing deterioration due to weak consumer demand, which may persist into the first half of fiscal year 2027 due to a high base effect [2] - Despite challenges in e-commerce, Alibaba's cloud revenue growth is accelerating year-over-year, driven by strong demand for AI solutions [3] Strategic Positioning - Alibaba is positioned as "China's Best AI Enabler," indicating its strong foothold in the AI sector, which is expected to support its growth despite challenges in other areas [2] - Jefferies highlighted the company's progress in its Quick Commerce business during the December quarter, suggesting a positive trajectory in this segment [3]