SourceMotley_fool

Sept 9, 2025 21:45

A financial analyst significantly raised his projections for the Chinese technology giant Alibaba Group (NYSE: BABA), causing a sharp increase in its stock price on Tuesday. American Depositary Receipts (ADR) listed in the United States closed up 4%, significantly outperforming the 0.3% gain of the S&P 500 index.

This surge follows the revision of outlooks by Jiong Shao, an analyst at Barclays (NYSE: BCS). He has raised his fair value estimate for Alibaba to $190 per ADR, representing a significant increase of 31% from his previous target of $145. Shao has maintained his "overweight" recommendation (equivalent to "buy") on the stock.

According to reports, Shao's optimism is primarily based on the performance of Alibaba's cloud computing division. The analyst highlighted that this business segment recorded a revenue growth of 26% year-on-year in the last quarter. He is convinced that this momentum can still accelerate while maintaining profit margins.

Although Alibaba's quarterly results fell short of analysts' expectations in terms of revenue and profitability, several factors were perceived positively by investors. In addition to the remarkable performance of the cloud business, the encouraging growth in e-commerce was also praised.

Despite these mixed results, the general sentiment among analysts remains positive regarding Alibaba's outlook. Like Shao, several of them have raised their price targets following the earnings release. One of them, Zixiao Yang of Arete, has even upgraded his recommendation from neutral to buy, with a price target set at 152 dollars per ADR.

This wave of optimism reflects experts' confidence in Alibaba's ability to capitalize on its strengths, particularly in cloud computing, to generate sustained and profitable growth in the future.