UBS's AI Investment Focus: UBS has identified Alibaba and Tencent as leading Chinese companies in the AI sector, highlighting their strong performance and growth potential, particularly in the context of generative AI and advancements in large language models.
Financial Performance and Capital Expenditure: Both companies have shown significant year-to-date stock gains, with Alibaba up 83% and Tencent over 54%. They are also increasing their capital expenditures on AI, with Alibaba raising spending by over 50% and Tencent more than doubling its investment year-over-year.
Chip Supply and Development: Despite uncertainties regarding U.S. chip shipments, Chinese internet giants like Alibaba and Tencent have sufficient chip stockpiles and are focusing on improving chip efficiency, reducing reliance on imports.
Broader Business Context: While both companies are investing heavily in AI, they continue to operate in other major sectors—Alibaba in e-commerce and Tencent in gaming—facing competitive pressures and regulatory challenges in their respective markets.
Wall Street analysts forecast BABA stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for BABA is 203.66 USD with a low forecast of 172.00 USD and a high forecast of 230.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
14 Analyst Rating
Wall Street analysts forecast BABA stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for BABA is 203.66 USD with a low forecast of 172.00 USD and a high forecast of 230.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
13 Buy
1 Hold
0 Sell
Strong Buy
Current: 177.180
Low
172.00
Averages
203.66
High
230.00
Current: 177.180
Low
172.00
Averages
203.66
High
230.00
Arete
Neutral -> Buy
upgrade
$190
2026-01-20
New
Reason
Arete
Price Target
$190
AI Analysis
2026-01-20
New
upgrade
Neutral -> Buy
Reason
Arete upgraded Alibaba to Buy from Neutral with a $190 price target.
Jefferies
Thomas Chong
Buy
downgrade
$231 -> $225
2026-01-08
Reason
Jefferies
Thomas Chong
Price Target
$231 -> $225
2026-01-08
downgrade
Buy
Reason
Jefferies analyst Thomas Chong lowered the firm's price target on Alibaba to $225 from $231 and keeps a Buy rating on the shares as part of an earnings preview. The analyst affirms Alibaba as a top pick in 2026 given its opportunities in artificial intelligence and cloud. In the December quarter, the company should continue to make solid progress in quick commerce across different metrics, the analyst tells investors in a research note.
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Freedom Capital
Buy
to
Hold
downgrade
$140 -> $180
2026-01-06
Reason
Freedom Capital
Price Target
$140 -> $180
2026-01-06
downgrade
Buy
to
Hold
Reason
Freedom Capital downgraded Alibaba to Hold from Buy with a price target of $180, up from $140.
Freedom Capital
Buy
to
Hold
downgrade
$140 -> $180
2026-01-06
Reason
Freedom Capital
Price Target
$140 -> $180
2026-01-06
downgrade
Buy
to
Hold
Reason
As previously reported, Freedom Capital downgraded Alibaba to Hold from Buy with a price target of $180, up from $140. While the cloud segment continues to deliver rapid growth, this comes at the cost of sharply rising capital expenditures and the payback is "still uncertain," the analyst tells investors. In addition, the retail business is supported by significant advertising spend, but it has shown more moderate growth compared with other e-commerce peers, the analyst added.
About BABA
Alibaba Group Holding Ltd is an investment holding company mainly engaged in the provision of technology infrastructure and marketing platforms. The Company operates its business through nine segments. The China Commerce Retail segment is engaged in the China commerce retail business. The China Commerce Wholesale segment is mainly engaged in the operation of 1688.com. The Cloud Intelligence segment provides cloud services. The International Commerce Retail segment provides customer management services, sales of goods and logistics services. The International Commerce Wholesale segment is mainly engaged in the operation of Alibaba.com. The Cainiao Represents Logistics Services segment provides fulfilment services. The Local Services segment’s revenue includes platform commissions, logistics services revenue. The Digital Media and Entertainment segment engages in the operation of Youku and Alibaba. The All Others segment is mainly engaged in the Sun Art, Freshippo and other business.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
