【9988 Performance Analysis】Alibaba's Last Quarter Results Missed Expectations　Read Analyst Latest Target Prices in One Article: Commentary on Alibaba Cloud AI and E-commerce

Alibaba (09988) For the quarter ending December 31, adjusted profit was 16.71 billion yuan (RMB), down 67% year-on-year, far below expectations, mainly due to poor performance in China e-commerce and international e-commerce divisions.

【9988 Earnings Conference】Alibaba CEO: Cloud and AI commercialization revenue expected to exceed $100 billion in five years; Immediate retail achieves profit in FY29

【9988 Earnings Report】Alibaba’s last quarter adjusted net profit was 16.7 billion RMB, below expectations, affected by strategic investments; revenue increased 2% year-on-year; AI Qianwen MAU surpasses 300 million

Goldman Sachs: Maintain “Buy” rating on Alibaba with a target price of HKD 180

Goldman Sachs maintains a “Buy” rating on Alibaba with a target price of HKD 180. Goldman notes that Alibaba’s revenue last quarter roughly met expectations, but performance deviated mainly due to increased investments in Tongyi Qianwen model and consumer apps last quarter.

Goldman also states that AI spending may lead to increased losses in “Other” business segments in the coming quarters. However, Alibaba shows some encouraging signs of turnaround, with cloud computing revenue accelerating growth, and e-commerce revenue stabilizing. The weak stock price creates an attractive buying opportunity.

Morgan Stanley: Maintain “Overweight” rating, cloud business growth expected to remain strong

Morgan Stanley issued a report maintaining an “Overweight” rating on Alibaba with a target price of $180. Alibaba’s cloud revenue grew 36% year-on-year last quarter. Morgan predicts that the token volume (words, i.e., AI language and currency units) will surge sixfold from December 2025 to March 2026, supported by cloud price increases and rising AI agent adoption. Growth momentum is expected to remain strong over the next few quarters, with growth accelerating to 40% this quarter and further to 45% in FY2027.

Morgan states that Alibaba’s management expects that in the next five years, external customer cloud revenue will reach $100 billion, with an annual compound growth rate of over 40%. Morgan anticipates signs of macro consumption recovery, with customer management revenue (CMR) growth possibly rebounding to 6% in the March quarter. While Alibaba’s short-term adjusted EBITA remains under pressure, rising cloud profit margins and narrowing losses in instant commerce will improve profitability in FY2027.

Dahua Securities: Lower target price to HKD 192, focus on instant e-commerce investments

Dahua Securities lowers Alibaba’s target price from HKD 206 to HKD 192. They state that last quarter’s adjusted net profit was below expectations, mainly due to investments in Taobao instant e-commerce. Dahua notes that Alibaba China’s CMR revenue growth slowed to 1%, mainly due to weakening growth in gross merchandise volume (GMV) and diminishing impact of software service fee adjustments.

Management indicated that e-commerce profitability for the quarter ending March 31 will improve, but EBITA growth in the coming quarters may fluctuate.

CICC: Taobao Flash Sale lost 21.1 billion RMB last quarter

CICC cuts Alibaba’s Hong Kong and US stock target prices by 13% to HKD 172 and USD 178, respectively, maintaining an “Outperform” industry rating. CICC states that both Alibaba China and overseas e-commerce divisions are under pressure. Last quarter, Taobao Flash Sale EBITA lost 21.1 billion RMB, with quarterly losses narrowing but still significant. International e-commerce revenue increased 3%, but segment EBITA losses widened due to promotional impacts.

CICC believes that domestic consumption showed signs of recovery in the first quarter, which may boost CMR year-over-year growth. However, pressures on domestic and international e-commerce remain due to uncertainties in consumption, regulation, subsidy reductions, and competition.