BABA Stock Slips Overnight: Alibaba’s AI Spending Draws Investor Scrutiny, Analysts Split
Alibaba stock experienced a decline as investors expressed concern over the company's $10.2 billion equity raise and the potential returns on its aggressive AI spending. Analysts remain divided, with Bernstein lowering its price target while Bank of America raised its target, citing strong cloud growth prospects.
Why it matters
The split in analyst sentiment highlights the broader market tension between funding expensive AI infrastructure and maintaining shareholder value in Chinese tech giants.
Bernstein lowered its Alibaba price target to $165 from $180 but kept an Outperform rating.Bernstein believes Alibaba can still generate good returns from its spending despite investor concerns over the share sale. Bank of America raised Alibaba’s price target to $175 from $172, implying a 54% upside. Alibaba Group (BABA) stock slipped overnight as investors weighed concerns over the company's recent $10.2 billion equity raise and whether its aggressive AI spending can deliver attractive returns. Wall Street offered mixed signals, with Bernstein lowering its price target while Bank of America raised its price target on stronger cloud growth expectations. Alibaba stock traded over 1% lower overnight, ahead of Tuesday. The stock fell more than 4% last week, marking a fourth straight week of losses.
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