Alibaba Group Holding’s latest valuation update edges its fair value estimate to about $197.98 per share, reflecting slightly stronger long term growth expectations supported by faster than anticipated cloud and AI momentum.
Analysts have nudged up revenue growth forecasts to roughly 9.34% and adjusted the discount rate modestly higher to 9.27%. This balances optimism around higher quality, recurring cloud and AI earnings with a more cautious stance on execution risk and required returns.
As these shifts in assumptions continue to reshape the stock’s narrative, you can track and interpret future updates to Alibaba’s evolving outlook to stay informed.
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🐂 Bullish Takeaways
Street sentiment remains skewed positive, with multiple firms, including Citi, BofA, JPMorgan, Jefferies, Bernstein, Susquehanna, Barclays, Mizuho and Baird, reiterating Buy, Overweight, Outperform or Positive ratings while lifting price targets into a roughly $168 to $245 range as Alibaba executes on cloud and AI growth.
Cloud and AI momentum is the dominant bull driver, with Citi (Alicia Yap) lifting its target to $225 and $217, JPMorgan to $245, Jefferies up to $230 and $178, and Barclays to $190, all citing accelerating AliCloud revenue, triple digit AI related demand and Alibaba’s positioning as a full stack AI services platform.
Several analysts reward execution quality and strategic clarity, highlighting faster than expected public cloud adoption, strengthening external cloud revenue contribution and management’s willingness to invest behind AI, quick commerce and one stop consumption platforms despite near term margin pressure.
BofA and Mizuho, which raised targets to $195 and $168 respectively, highlight improving life services initiatives, data center expansion plans and Alibaba’s growing role in financial services and banking workloads. This, in their view, reinforces the case for higher quality, recurring earnings and a re rating in the stock’s valuation.
Even where near term profitability is constrained, bulls such as Macquarie and Bernstein, with targets around $218.80 and $200, argue that Alibaba is evolving into a full stack AI provider and that accelerating AliCloud revenue should continue to support the shares over a multi year horizon.
🐻 Bearish Takeaways
Caution mainly centers on whether recent share gains have already priced in much of the AI and cloud upside. Bernstein, for example, warns that near term valuation has moved into “art more than science” territory even as it maintains an Outperform rating and a higher $200 target.
Macquarie’s cut in its target to $218.80 from $234.70 and BofA’s recent trim to $188 from $200 underscore concerns that ongoing investments in quick commerce and guided deceleration in customer management revenue will keep near term margins compressed and add execution risk.
Across revisions, several firms acknowledge that higher capital intensity, competitive pressures in instant commerce and the need for sustained heavy AI investment introduce uncertainty around the pace at which stronger cloud growth can translate into durable free cash flow and justify the richer valuation implied by the upper end of Street targets.
Story Continues
Do your thoughts align with the Bull or Bear Analysts? Perhaps you think there’s more to the story. Head to the Simply Wall St Community to discover more perspectives or begin writing your own Narrative!
NYSE:BABA Community Fair Values as at Dec 2025
Alibaba’s Qwen consumer AI chatbot topped 10M downloads in its first week of public beta in mainland China, underscoring rapid user adoption and its emergence as a domestic rival to ChatGPT and Gemini.
The company is planning a major overhaul and rebranding of its flagship mobile AI app as Qwen, adding agent-like features that guide shopping on Taobao and related platforms to build a broad, monetizable consumer AI ecosystem.
Alibaba Cloud unveiled a GPU pooling system that reportedly cut required Nvidia H20 GPUs by 82% when running dozens of large language models, signaling progress in AI infrastructure efficiency under U.S. export curbs.
Alibaba is integrating Nvidia’s AI tools for physical AI into its cloud platform while rejecting a White House memo alleging its AI and cloud technology support the Chinese military, calling the claims an attempt to malign the company.
The fair value estimate has risen slightly from approximately $196.83 to $197.98 per share, reflecting modestly higher long-term growth expectations.
The discount rate has increased marginally from about 9.24% to 9.27%, implying a slightly higher required return and modestly higher perceived risk.
The revenue growth forecast has risen moderately from around 8.79% to 9.34%, indicating stronger anticipated top-line expansion.
The net profit margin assumption has edged down from roughly 13.56% to 13.25%, signaling a small reduction in expected profitability.
The future P/E multiple has declined slightly from about 24.44x to 24.30x, suggesting a marginally lower valuation multiple applied to forward earnings.
Narratives are investor created stories that explain the why behind the numbers, linking a company’s business drivers to forecasts for revenue, earnings and margins, and ultimately to a fair value. On Simply Wall St’s Community page, millions of investors use Narratives as an accessible tool to compare Fair Value with today’s Price, helping them decide when to buy or sell. Because Narratives update dynamically as news, earnings and guidance change, they offer a living view of how a company’s story and valuation evolve over time.
Read the full Narrative on Alibaba Group Holding to see how cloud and AI are reshaping its long term valuation:
Why massive investment in AI, cloud and quick commerce could lift long run revenue growth and improve earnings quality despite near term margin pressure.
How partnerships, ecosystem integration and open source AI models might expand Alibaba’s enterprise reach, user engagement and long term profit potential.
What risks, from stiff quick commerce competition to regulatory and macro uncertainty, could derail the path to the Narrative’s implied fair value of about $198 per share.
Follow the full Alibaba Group Holding Narrative on Simply Wall St to stay aligned with every change in its story, forecasts and Fair Value.
Curious how numbers become stories that shape markets? Explore Community Narratives
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include BABA.
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