TLDR
- Jefferies keeps Buy rating and $225 price target on Alibaba as Qwen app integrates Taobao, Alipay, Fliggy, and Amap for automated tasks
- Qwen app surpasses 100 million monthly users within two months, processes 400+ daily tasks from shopping to travel booking
- Alibaba Cloud leads AI market with 35.8% revenue share, targets 80% of 2026 incremental industry growth
- Morgan Stanley holds Overweight rating at $180 despite short-term margin pressure from user acquisition spending
- Strong Buy consensus from 13 analysts with $203.66 average target implies 19% upside from $167.79 current price
Wall Street analysts are raising their confidence in Alibaba as the company transforms AI capabilities into practical revenue streams. The focus centers on Qwen, an AI app that’s quickly gaining users while Alibaba Cloud extends its market lead.
Alibaba Group Holding Limited, BABA
Jefferies analyst Thomas Chong reaffirmed his Buy rating with a $225 price target. He highlighted Qwen’s new integration with major Alibaba services including Taobao for shopping, Alipay for payments, Fliggy for travel, and Amap for navigation. Users complete real transactions inside the app rather than jumping between platforms.
The adoption numbers validate the strategy. Qwen reached 100 million monthly active users in just two months after launch. The platform now handles more than 400 types of daily tasks spanning quick commerce, meal ordering, trip planning, restaurant reservations, and 50+ public services through Alipay.
This shift from conversational AI to action-oriented AI sets Alibaba apart. Chong believes the company is building a genuine competitive edge as AI moves from answering questions to completing actual work.
Cloud Business Extends Market Leadership
Alibaba Cloud maintains its position as the AI cloud revenue leader with 35.8% market share in the first half of 2025. The share exceeds the combined total of the second through fourth ranked competitors.
About 70% of cloud customers use both API model services and GPU computing resources. Companies are deploying Alibaba’s infrastructure to train and customize AI models using proprietary datasets. With over 90% of enterprises yet to adopt AI technology, the addressable market remains largely untapped.
Industry analyst firm Omdia projects AI revenue will surge 149% year-over-year from 20.83 billion yuan in 2024 to 51.8 billion yuan in 2025. Alibaba Cloud has set a target to capture 80% of new industry revenue in 2026. Jefferies expects triple-digit growth rates to continue with market share potentially reaching 60% this year.
Morgan Stanley analyst Gary Yu maintained an Overweight rating and $180 price target. He identified consumer AI and automated task completion as key investment themes for the year ahead. Yu sees Alibaba’s diverse service portfolio giving Qwen a strong path to becoming the dominant all-in-one AI platform.
Investment Spending Weighs on Near-Term Profits
The rapid user growth requires substantial marketing investment and user incentives. Morgan Stanley acknowledged these costs will create headwinds for profit margins in upcoming quarters. However, Yu expects gains from higher user engagement and cloud expansion to outweigh the short-term spending.
The stock currently trades at $167.79 with a market capitalization of $379.84 billion. Over the past year, shares returned 109.54% to investors. InvestingPro rates the company’s financial health at 2.59, classified as good.
Wall Street shows strong conviction with a consensus Strong Buy rating based on 13 Buy recommendations and one Hold over the past three months. The average analyst price target stands at $203.66, suggesting approximately 19% upside potential from current levels.
Alibaba reports quarterly earnings on February 19. Analysts will watch for Qwen user metrics, cloud revenue growth acceleration, and management guidance on AI monetization. The stock’s PEG ratio of 0.42 indicates potential undervaluation relative to growth prospects.
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