U.S.-listed Alibaba Group (BABA) stock was higher in early trading Monday, building on a strong month for the Chinese e-commerce and cloud-computing giant. The gains come as Wall Street analysts issued bullish views following Alibaba’s recent cloud conference in China.
At the conference, CEO Eddie Wu announced that the company plans to exceed its previously disclosed $53 billion, three-year investment in AI infrastructure, citing demand that has far outstripped expectations. The announcement, coupled with a new partnership with Nvidia (NVDA) focused on physical AI, pushed Alibaba stock to its highest levels since October 2021. Shares had surged 8% last Wednesday before pulling back roughly 2.5% over Thursday and Friday trades. On Monday, Alibaba shares gained more than 3% in premarket trading, reaching 177.89.
Analyst optimism has accelerated alongside the company’s AI and cloud expansion. Morningstar raised its fair value estimate for Alibaba by 49% to 267, highlighting the increased capital expenditures as essential to meet strong global demand for AI infrastructure. “The projected surge in global data center energy consumption signals a robust outlook for cloud revenue,” said Morningstar analyst Chelsey Tam.
Jefferies also lifted its target price for Alibaba to 230 from 178, citing momentum in the company’s cloud business. Overall, more than a dozen analysts have raised their targets for Alibaba this month, according to FactSet. The average price target among 53 analysts now stands at 181.32, up from 160.75 at the end of August. Roughly 92% of analysts covering Alibaba maintain a buy or equivalent rating.
Alibaba has surged more than 102% year-to-date, including a 27% gain in September alone (before Monday’s early trading). The rally was initially triggered by a strong fiscal Q1 earnings report on Aug. 29 and news that the company was developing its own AI chip. Shares broke out above a consolidation pattern buy point of 148.43 on Sept. 11 and have climbed sharply beyond a 5% buy zone, according to MarketSurge.
The stock also boasts an impressive IBD Composite Rating of 91 out of 99, reflecting strength across five proprietary rating measures and signaling robust technical and fundamental performance.
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