Benchmark Reaffirms Buy Rating on Alibaba (BABA) Following AI Cloud Expansion

David Tepper ranks among the richest hedge fund managers in the world. Alibaba Group Holding Limited (NYSE:BABA) is David Tepper’s largest holding, accounting for 10.88% of the billionaire’s total portfolio.

On May 14, Benchmark reaffirmed its Buy rating on Alibaba Group Holding Limited (NYSE:BABA) and set a $220 price target on the company’s shares. The firm noted that Alibaba’s fourth-quarter fiscal 2026 earnings were roughly in line with estimates, though short of consensus. The company achieved favorable results in three critical areas: AI and cloud growth, rapid commerce loss, and group-wide profitability.

Given robust enterprise demand, AI-related revenue grew at triple digits, and external AI cloud revenue surged to roughly 40% year-over-year. As the company expands its machine learning-as-a-service and agentic AI solutions, management looks forward to significant margin expansion in the upcoming quarters.

Alibaba Group Holding Limited (NYSE:BABA) also noted a clear path to breakeven for rapid commerce, with unit economics turning green by the end of the fiscal year and losses expected to be cut in half over the next two years. At the same time, Benchmark predicts a 35%-plus EBITA compound annual growth rate for Chinese e-commerce.

Alibaba Group Holding Limited (NYSE:BABA) is a Chinese technology company that provides e-commerce platforms, logistics, payments, and technology infrastructure. Founded in 1999, the company operates several businesses, including Taobao and Tmall, 1688.com, AliExpress, and Daraz.

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