Freedom Capital Downgrades Alibaba (BABA) Despite Raising Price Target to $180

Alibaba Group Holding Limited (NYSE:BABA) is one of the AI Stocks Gaining Attention on Wall Street. On January 6, Freedom Capital downgraded the stock to “Hold” from Buy with a price target of $180, up from $140. The downgrade follows BABA’s quarterly results, with analysts highlighting rising capex and cost pressures offsetting cloud momentum.

The firm noted how Alibaba reported quarterly results that were above expectations. While its cloud segment continues to demonstrate massive growth and acts as a key driver for the stock, it comes at the cost of rapidly rising capital expenditures. The very expenditures whose payback prospects remain uncertain.

The company’s retail business, on the other hand, showed moderate growth compared to ecommerce peers. As such, the main factor that is going to make or break BABA’s performance in the coming quarters is its ability to expand both retail and cloud operations without a steep increase in related costs, analysts noted.

“We lower our rating to a ‘Hold’ recommendation and raise our price target for BABA from $140 to $180.”

Alibaba Group Holding Limited (NYSE:BABA) is an internet giant that offers e-commerce services in China and internationally.

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