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Bernstein Hikes Price Target on Alibaba Group Holding Ltd (BABA)

Alibaba Group Holding Ltd (NYSE:BABA) shares are trending after Bhavtosh Vajpayee of Bernstein hiked his price target on the e-commerce giant to $130 per share from $117. In particular, Vajpayee increased his price target due to his expectation that Alibaba will benefit greatly from more cloud computing profits, lower online video acquisition costs, and more ad revenues. In addition, the analyst thinks Alibaba’s fiscal 2020 profits will be 15% higher than the current Wall Street estimate. Needless to say, Bernstein has an ‘Outperform’ rating on Jack Ma’s company.

For many investors, Alibaba is now more than just an e-commerce company. Like Amazon and AWS, Alibaba Group Holding Ltd (NYSE:BABA) also has a fast growing cloud division that could unlock substantial shareholder value over time. In addition, many investors expect Alibaba to capture a big piece of China’s lucrative fintech market, which some analysts think could amount to $65 billion annually by the end of the decade.

What Does The Smart Money Sentiment Say?

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 39.7% gains over the past 12 months and outperformed the 24.1% gain enjoyed by the S&P 500 ETFs. Our enhanced small-cap hedge fund strategy returned more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points over the last 4.5 years (see details here).

According to our data, the smart money in aggregate wasn’t as bullish in Q4 as they were in Q3. Of the 742 elite funds we track, 86 funds owned $5.9 billion of Alibaba Group Holding Ltd (NYSE:BABA) and accounted for 2.70% of the float on December 31, versus 104 funds and $8.27 billion respectively on September 30. Cliff Asness‘ AQR Capital Management inched up its stake by 7% to 3.8 million shares at the end of 2016.

The Bottom Line

Wall Street is becoming more bullish on Alibaba Group Holding Ltd (NYSE:BABA)’s long term prospects, and today’s Bernstein price target hike is just the latest example of the trend. For those of you interested, check out this interesting article on the 10 best selling products on Alibaba.

Disclosure:None

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