--- title: "Alibaba Stock Rises over 4% as Bank of America Says \"Earnings Inflection\" Is Underpriced" type: "News" locale: "en" url: "https://longbridge.com/en/news/301416504.md" description: "Alibaba stock rose 4.5% after Bank of America raised its price target to $178, citing an underpriced earnings inflection driven by cloud and AI growth. BofA forecasts the combined segment to reach breakeven by late fiscal 2027, with cloud revenue expected to surge 52%. While e-commerce faces consumer spending pressures, Wall Street maintains a Strong Buy consensus with an average target of $191.74." datetime: "2026-10-09T15:08:27.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/301416504.md) - [en](https://longbridge.com/en/news/301416504.md) - [zh-HK](https://longbridge.com/zh-HK/news/301416504.md) generator: "portal-rs" --- # Alibaba Stock Rises over 4% as Bank of America Says "Earnings Inflection" Is Underpriced Alibaba stock (BABA) rose 4.5% in Friday's trading. Bank of America analyst Joyce Ju raised her price target to $178 from $175 and kept a Buy rating. The new target implies about 61% upside from current levels. The bank believes investors do not fully price in Alibaba's expected earnings growth as its cloud and AI business moves toward breakeven. Bank of America raised its earnings estimates by 3% to 9%. It values Alibaba at 15 times estimated fiscal 2027 non-GAAP earnings and 11 times fiscal 2028 earnings. ## **Cloud Growth Could Lift Earnings** Bank of America forecasts September-quarter revenue growth of 10% year over year and adjusted EBITA of RMB30 billion. This would top the RMB26 billion consensus and RMB27 billion in the June quarter. Cloud revenue is expected to grow 52%, up from 45% in the prior quarter. External customer demand could rise nearly 55%, while cloud margins are forecast to reach 12.9%, versus 11.6%. Better training efficiency should also cut losses at AI labs and applications to RMB11 billion from RMB14 billion. Bank of America expects cloud earnings to cover AI losses from the December quarter. This could help the combined cloud and AI business move from a loss of more than RMB20 billion in fiscal 2026 to breakeven in the second half of fiscal 2027. The bank forecasts cloud growth of 52% in fiscal 2027, 57% in fiscal 2028, and 41% in fiscal 2029. ## **E-Commerce Faces Consumer Spending Pressure** Bank of America expects customer management revenue (CMR) to fall 5% year over year in the September quarter, reflecting weak consumer spending in China. Despite this pressure, the bank forecasts e-commerce adjusted EBITA growth of 2%. China e-commerce EBITA, excluding quick commerce, is expected to remain broadly flat. Quick-commerce losses should narrow to RMB9.6 billion from RMB9.8 billion in the June quarter. ## **Is Alibaba Stock a Buy Now?** Wall Street remains constructive on the stock. Alibaba carries a Strong Buy consensus rating based on 12 Buy ratings over the past three months. The average BABA price target stands at $191.74, suggesting 73.83% upside from current levels. ### Related Stocks - [BABA.US](https://longbridge.com/en/quote/BABA.US.md) - [BABC.US](https://longbridge.com/en/quote/BABC.US.md) - [BABO.US](https://longbridge.com/en/quote/BABO.US.md) - [BABU.US](https://longbridge.com/en/quote/BABU.US.md) - [BABW.US](https://longbridge.com/en/quote/BABW.US.md) - [BABX.US](https://longbridge.com/en/quote/BABX.US.md) - [BBYY.US](https://longbridge.com/en/quote/BBYY.US.md) - [KBAB.US](https://longbridge.com/en/quote/KBAB.US.md) - [09988.HK](https://longbridge.com/en/quote/09988.HK.md) - [HBBD.SG](https://longbridge.com/en/quote/HBBD.SG.md) - [BAC.US](https://longbridge.com/en/quote/BAC.US.md) ## Related News & Research - [Alibaba Cloud Raises .com Domain Prices](https://longbridge.com/en/news/302807324.md) - [DeepSeek raises US$15 billion in challenge to leading US labs](https://longbridge.com/en/news/302641765.md) - [BABA-W Tmall Double 11 Officially Launches, 124 Brands Record Transactions Exceeding RMB100 million on First Day](https://longbridge.com/en/news/302676371.md) - [Taobao deepens Singapore presence with US$14.9 million marketing push](https://longbridge.com/en/news/302376170.md) - [Taobao plans to deepens its presence in Singapore, injects 100 million yuan into local marketing push](https://longbridge.com/en/news/302374217.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**