<div id="readability-page-1"><p>E-commerce giant Alibaba (BABA) is expected to report Q3 FY26 results this month. While most Wall Street analysts remain bullish on the stock ahead of its upcoming results, one firm is stepping to the sidelines. Erste Group analyst Hans Engel downgraded Alibaba from Buy to Hold, becoming the only analyst in the latest coverage cycle without a Buy rating on the stock.</p><h3>President's Day Sale - 70% Off</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> <p>The move comes even as sentiment around Alibaba has improved due to its AI and cloud momentum.</p> <h2><strong>Profitability Is the Real Concern</strong></h2> <p>The analyst said Alibaba's AI strategy is a positive. Management is focused on generating revenue from AI through its cloud business. The company is also developing its own AI chips, which over time could make Alibaba less dependent on outside suppliers and strengthen its platform.</p> <p>These efforts may improve the company's competitive position and support future growth as more businesses increase spending on AI computing.</p> <p>That said, the analyst's main concern is profitability.</p> <p>He noted that Alibaba's operating margin has declined in recent quarters. Heavy spending on technology and infrastructure, including AI projects, is weighing on earnings. The company's long-term liabilities have also increased, which could limit flexibility if growth slows.</p> <p>As a result, he does not expect a sharp earnings recovery soon, even if sales remain stable. For now, he believes the stock is likely to trade sideways rather than deliver strong gains.</p> <h2><strong>What Is the Price Target for BABA Stock?</strong>  </h2> <p>According to TipRanks, Alibaba stock has received a Strong Buy consensus rating, with 15 Buys and one Hold rating assigned in the last three months. The average Alibaba price target of $203.09 implies about 30.38% upside potential from current levels.</p></div>

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<p>E-commerce giant Alibaba (BABA) is set to report Q3 FY26 results, with most analysts bullish except Erste Group's Hans Engel, who downgraded the stock from Buy to Hold. Despite positive sentiment around Alibaba's AI and cloud initiatives, Engel's main concern is profitability due to declining operating margins and increased long-term liabilities. He anticipates the stock will trade sideways rather than see strong gains. The average price target for Alibaba is $203.09, suggesting a 30.38% upside potential.</p>

- E-commerce giant Alibaba is set to report Q3 FY26 results, with mixed analyst sentiment ahead of the report.  
- A downgrade from Erste Group analyst Hans Engel moved Alibaba from Buy to Hold, citing declining profitability despite positive AI and cloud developments.  
- The stock has an average price target of $203.09, suggesting a 30.38% upside potential, although the analyst expects limited immediate earnings recovery.

Why a Lone Hold Rating Appeared on Alibaba (BABA) Before Earnings