<div id="readability-page-1"><h5><em>This article was written by Shalu Saraf and reviewed by Gilan Miller-Gertz.</em></h5> <p>Shares of Alibaba (BABA) fell more than 3% on Tuesday after Freedom Capital Markets analyst Roman Lukianchikov downgraded the stock to Hold from Buy and cut his price target to $140 from $180. The move came despite Alibaba reporting better-than-expected Q2 FY26 results, as the analyst pointed to higher spending and slower growth in the company's core retail business.</p><h3>Claim 70% Off TipRanks Premium</h3><ul><li>Unlock  hedge fund-level data  and  powerful investing tools  for smarter, sharper decisions  </li><li> Stay ahead of the market with  the latest news and analysis  and maximize your portfolio's potential</li></ul> <h2><strong>Freedom Capital Markets Turns Cautious on Alibaba</strong></h2> <p>Lukianchikov said Alibaba's latest quarter beat expectations, but he still sees rising cost risks. In his view, the key issue is not growth, but the rising cost needed to support it.</p> <p>He said cloud remains a key strength, with revenue rising about 34% from a year ago due to growing demand for AI. Still, Lukianchikov cautioned that higher spending is weighing on visibility, as it remains unclear when those investments will pay off.</p> <p>At the same time, the analyst pointed to slower progress in Alibaba's core retail business. While ad spending supported sales, growth continued to trail other e-commerce leaders. In his view, this suggests Alibaba may need to keep spending more just to stay competitive.</p> <p>Taken together, Lukianchikov said these trends limit near-term upside. As a result, he prefers to remain on the sidelines for now, citing the need for clearer progress on costs and returns.</p> <h2><strong>Is Alibaba Stock a Buy Now?</strong></h2> <p>Even with these risks, Wall Street remains constructive on the stock. Alibaba stock carries a Strong Buy consensus rating, based on 14 Buy ratings and one Hold over the past three months. The average BABA price target stands at $205.41, suggesting roughly 36% upside from current levels.</p></div>

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<p>Shares of Alibaba (BABA) fell over 3% after analyst Roman Lukianchikov downgraded the stock to Hold and reduced the price target from $180 to $140. Despite better-than-expected Q2 FY26 results, concerns over rising costs and slower growth in the retail sector led to this cautious stance. While Alibaba's cloud revenue grew 34% due to AI demand, the analyst noted that increased spending is impacting visibility on returns. Wall Street maintains a Strong Buy consensus with an average price target of $205.41, indicating potential upside.</p>

- Alibaba (BABA) shares dropped over 3% after Freedom Capital Markets analyst Roman Lukianchikov downgraded the stock from Buy to Hold, reducing the price target from $180 to $140.  
- Despite a strong Q2 FY26 performance, Lukianchikov cited rising costs and slower growth in Alibaba’s core retail business as concerns impacting short-term prospects.  
- While Wall Street maintains a Strong Buy consensus rating, with an average price target of $205.41, analysts emphasize the need for clearer improvements in cost management and investment returns.

Why Alibaba Stock (BABA) Fell on Tuesday