Key Takeaways
- Bank of America kept its Buy rating and $178 price target on Alibaba on Nov. 11. That’s 76% above today’s price, after the stock fell 38% over the past year.
- The stock fell as Alibaba’s earnings dropped and it spent heavily on AI data centers, then sold new shares to pay for more.
- The $178 target means about 22x forward earnings, against Alibaba’s five-year average of 13x, while earnings estimates have barely moved in 90 days.
- Bank of America looks right about the cloud, but the multiple its target needs will probably wait until the cash flow turns. Alibaba’s Nov. 19 report is the next test.
Alibaba Group (BABA) stock is down 38% over the past year, and Bank of America thinks it can climb all the way back to its January high. On Nov. 11, analyst Joyce Ju kept her Buy rating and $178 price target, 76% above today’s price.
The AI bill came due
Normalized earnings fell 59% in fiscal 2026 (the year to March) to RMB 26.80 per US-listed share, as Alibaba spent heavily on its quick-commerce delivery business and on AI. The June quarter, reported Aug. 20, showed the full cost. Free cash flow was an outflow of RMB 44.7 billion, as capital spending hit RMB 67.7 billion. A few days later, Alibaba sold HK$80 billion of new shares and set aside all of the money for AI.
Bank of America is betting on the cloud
Ju raised her target to $178 from $175 on Oct. 9, pointing to stronger momentum in the cloud business, and raised her earnings estimates for fiscal 2027 to 2029 by 3% to 9%. So far the cloud numbers back her up. AI cloud revenue grew 45% in the June quarter, and the segment’s adjusted EBITA margin rose to 11.6% from 7.2% a year earlier.
Her Nov. 11 note followed Alibaba’s plan to spin off its T-Head chip unit and list it in Hong Kong, and she called any upside from it “premature.” And Bank of America isn’t alone: Goldman Sachs reiterated its Buy rating with a $177 target two days earlier.
TIKR tracks 41 analysts on Alibaba. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Alibaba, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Alibaba’s Analyst Ratings
Does $178 add up?
41 analysts cover Alibaba. Their average target is $184, and the range runs from $96 to $222. That average has fallen over the past year, and much less than the stock has:
Those targets rest on a sharp earnings rebound. Analysts expect normalized EPS of RMB 44.25 per US-listed share in fiscal 2027 and RMB 61.65 in fiscal 2028. That would put it back near fiscal 2024’s RMB 62.23:
Those estimates have barely moved in 90 days, and nothing in the T-Head listing gives analysts a reason to raise them.
The multiple is the hard part. Alibaba trades at 13x forward earnings, right at its five-year average:
At $178, the stock would trade at about 22x forward earnings. The last time investors paid that much was January, when the multiple peaked at 25x.
The risk is cash: even Goldman’s base case has Alibaba’s cash coming in faster than it goes out only by mid-2028. Ju is right that the cloud is working. But I doubt investors pay 22x again while cash keeps leaving the business, so $178 looks more like a 2028 price. Alibaba reports its September quarter on Nov. 19, and a cloud margin above June’s 11.6% would bring that rerating closer.
So what is Alibaba stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
