Alibaba stock price continued it strong rally in Hong Kong after JPMorgan analysts boosted their target. BABA shares have jumped in the last four consecutive weeks and are trading at the highest level since August 2021. They have soared by nearly 200% from the lowest level in 2024.
JPMorgan analysts have boosted their Alibaba stock target
The main reason why the Alibaba stock price is surging is that analysts at JPMorgan boosted the target, citing its market potential in the artificial intelligence (AI) and cloud industries.
These analysts now see the BABA stock price soaring to H$240, up by 30% from the current level. They noted that:
“Alibaba is positioned to participate at every stage – compute, platforms, and apps – while directly improving merchant economics.”
JPMorgan’s bullish call mirrored that of Morningstar, which noted that the stock was undervalued. The analysts noted that:
“Alibaba’s increased investment in overseas data centers, competitive performance, widespread use of its open-source models, and improved performance of its self-developed chip all support cloud revenue growth.”
Alibaba went through a rough patch in the past few years after Jack Ma, its founder, criticized Beijing officials for their regulatory overreach.
Since then, officials have cancelled the $300 billion of Ant Financial, a large fintech platform. They then moved in and intensified their regulatory strategy on the company, accusing it of stifling competition.
Recently, however, official have relaxed their criticism on the company. This culminated in a meeting between Jack Ma and Xi Jinping earlier this year. Ma has also moved back to the company, although not as the CEO.
Betting big on cloud computing
Alibaba stock price has jumped as the company has maintained its goal of being a major player in the AI space. It launched several models in 2024 that have become highly popular in China.
At the same time, the company is aiming to become a major provider of GPUs in the future. Recent news reports show that the company has designed custom GPUs that will be manufactured in China.
Most recently, the company said that it would boost its AI spending above $50 billion. In his statement, Eddie Wu, the CEO noted that AI spending would hit $4 trillion by the end of the decade. As such, the company believes that more spending will help it to catch up with other firms.
Cloud to offset retail and food delivery headwinds
The ongoing Alibaba stock price surge is a sign that investors anticipate that its cloud and AI business will offset the weakness in the retail and cloud computing industry.
Its most challenging business is Ele.me, which offers food delivery services in the country. This division has slowed substantially in this year following the entry of JD.com, which launched a similar service and started a pricing war.
The most recent results showed that the e-commerce group revenue rose by 10% in the last quarter to $12.5 billion. The international digital commerce group’s revenue rose by 19% to $4.85 billion, while the Cloud Intelligence Group jumped by 26% to $4.6 billion.
BABA stock price technical analysis
The weekly chart shows that the BABA stock price has been in a strong bullish trend in the past few years. It has jumped from a low of $57.65 to $184.5. It recently moved above the important resistance level at $142.8, its highest point on March 3.
The stock has jumped above the 50-week and 25-week Exponential Moving Averages (EMA). Also, the stock has jumped above the 50% Fibonacci Retracement level.
The Relative Strength Index (RSI) and the MACD have all pointed upwards. Therefore, the most likely scenario is where it continues rising as bulls target the key resistance at $243.4, the 78.6% retracement level.
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