Benchmark Keeps Buy Rating on Alibaba (BABA) Despite Challenges

Alibaba Group Holding Limited (NYSE:BABA) is one of the 12 Best Performing AI Stocks So Far in 2025. On July 21, Benchmark reiterated its Buy rating on Alibaba Group Holding Limited (NYSE:BABA) with a price target of $176.

Benchmark noted that the company could face near-term margin pressure because of investments in Food Delivery and Instant Retail services. This led the firm to reduce its Q1 fiscal 2026 and fiscal year 2026 earnings estimates.

Benchmark Keeps Buy Rating on Alibaba (BABA) Despite Challenges

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Benchmark sees this increase in investment by Alibaba Group Holding Limited (NYSE:BABA) as defensive, to respond to JD.com, Inc. (JD) entering the market and making some early market share gains in these segments.

Despite the near-term pressure, the firm pointed out strategic benefits for Alibaba Group Holding Limited (NYSE:BABA) as it can improve and reposition its core e-commerce strategy with a more integrated retail ecosystem approach, which could help the company grow in the long run.

Alibaba Group Holding Limited (NYSE:BABA) is a Chinese multinational technology company focused on e-commerce, retail, AI, digital media and entertainment, cloud, and technology.

While we acknowledge the potential of BABA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than BABA and that has a 100x upside potential, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.