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?
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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.