--- title: "Daiwa: Reiterates \"Buy\" rating on Alibaba-W, lowers target price to HKD 184" type: "News" locale: "en" url: "https://longbridge.com/en/news/279879792.md" description: "Daiwa reiterated its \"Buy\" rating on Alibaba-W, with a target price lowered to HKD 184, due to the third quarter performance of fiscal year 2026 falling short of expectations, primarily affected by the growth in cloud business revenue and profitability. Earnings per share for fiscal years 2026 to 2028 are expected to be revised down by 6% to 15%. Management reaffirmed its mid-term goal, including achieving external AI and cloud business revenue of USD 100 billion within five years. Despite a slight decrease in capital expenditure, there remains an upside risk" datetime: "2026-03-20T03:14:05.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/279879792.md) - [en](https://longbridge.com/en/news/279879792.md) - [zh-HK](https://longbridge.com/zh-HK/news/279879792.md) --- > Supported Languages: [简体中文](https://longbridge.com/zh-CN/news/279879792.md) | [繁體中文](https://longbridge.com/zh-HK/news/279879792.md) # Daiwa: Reiterates "Buy" rating on Alibaba-W, lowers target price to HKD 184 According to the Zhitong Finance APP, Daiwa released a research report stating that it has lowered its earnings per share forecast for Alibaba-W (09988) for the fiscal years 2026 to 2028 by 6% to 15%, while reiterating a "Buy" rating. This adjustment is mainly based on the third quarter earnings being below expectations, and the 12-month target price based on the Sum-of-the-Parts (SOTP) valuation method has been reduced from HKD 191 to HKD 184. The firm maintains its long-term view on the group's AI-driven cloud business but warns that further subsidizing user acquisition costs poses a significant downside risk. The firm believes that as of the end of December last year, Alibaba's performance in the third quarter of fiscal year 2026 was below expectations, primarily due to disappointing revenue growth in the cloud business and the group's profitability. Management reiterated its mid-term goals during the earnings call, including achieving external artificial intelligence (AI) and cloud business revenue of USD 100 billion within five years, and expecting the gross merchandise volume (GMV) of its quick commerce business to reach RMB 1 trillion by fiscal year 2028, with overall profitability turning positive by fiscal year 2029. The firm believes that AI and cloud businesses are strengthening their monetization focus, with external AI and cloud business revenue reaching RMB 100 billion in the first 11 months of fiscal year 2026 ending in late February this year, and overseas market revenue accounting for a high single-digit percentage. With the average daily token processing volume in March doubling compared to December last year, along with price increases for cloud products, it is expected to drive accelerated growth in external cloud business revenue in 2026. Management has not provided a clear timeline for the IPO of Tianshu Technology but disclosed that annualized revenue has reached RMB 10 billion, with over 60% of chips used for external clients, and it is expected to further expand in scale in 2026 to 2027. Last quarter, capital expenditures slightly decreased to RMB 29 billion, but the firm believes that the total capital expenditure budget of RMB 380 billion still carries upside risks ### Related Stocks - [Alibaba Group Holding Limited (BABA.US)](https://longbridge.com/en/quote/BABA.US.md) - [BABA-W (09988.HK)](https://longbridge.com/en/quote/09988.HK.md) - [KraneShares 2x Long BABA Daily ETF (KBAB.US)](https://longbridge.com/en/quote/KBAB.US.md) - [Global X Cloud Computing ETF (CLOU.US)](https://longbridge.com/en/quote/CLOU.US.md) - [GraniteShares 2x Long BABA Daily ETF (BABX.US)](https://longbridge.com/en/quote/BABX.US.md) - [YieldMax BABA Option Income Strategy ETF (BABO.US)](https://longbridge.com/en/quote/BABO.US.md) ## Related News & Research - [Alibaba Reportedly Launches New AI Platform That Oversees Multiple Agents](https://longbridge.com/en/news/279412426.md) - [Alibaba Unveils Token Hub To Consolidate AI Efforts](https://longbridge.com/en/news/279272192.md) - [Alibaba has made 470,000 AI chips, admits they’re inferior and may always be](https://longbridge.com/en/news/279869327.md) - [Baidu’s DuClaw AI Agent Platform Tests Enterprise Demand And Valuation Gap](https://longbridge.com/en/news/279118490.md) - [Alibaba Unveils 'Wukong' AI To Automate Office Work, Replace Daily Chores](https://longbridge.com/en/news/279427888.md)