‘Margins Could Get Worse,' Warns Top Analyst about Alibaba Stock (BABA) Ahead of Q1 Earnings
Elevate Your Investing Strategy:
Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Analyst's Views on Alibaba Stock
Helfstein, a four-star analyst, said that this quarter marked the first clear sign of margin pressure for Alibaba, driven by its push to stay competitive in local commerce. Mizuho expects a sharp drop in margins in Q1 compared to the previous quarter.
Looking ahead, the analyst warned that this margin strain could continue through the rest of 2025 and into 2026 unless new rules are introduced to ease competitive pressure. In response, Mizuho slashed its June-quarter EBITDA forecast from 55 billion RMB to 45 billion RMB.
The firm also lowered its FY27 EBITDA estimate to RMB231 billion, reflecting Alibaba's push to protect market share through heavy subsidies. Earlier this month, the company announced a 50 billion yuan ($7 billion) subsidy program via its Taobao unit. The initiative will support food delivery and online retail services as Alibaba tries to fend off growing competition from JD.com (JD), PDD Holdings (PDD), and Meituan.
Nevertheless, the analyst remains confident in Alibaba's long-term outlook and maintained an Outperform rating on the stock. He noted that consumer demand stayed strong during the June quarter, helped by promotional events and smartphone trade-in offers.
Is Alibaba Stock a Good Buy Right Now?
Analysts remain highly bullish about Alibaba's stock trajectory. With 14 Buy ratings and one Hold rating, BABA stock commands a Strong Buy consensus rating on TipRanks. Also, the average Alibaba price target of $151.81 implies about 25.31% upside potential from current levels.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNBC
16 minutes ago
- CNBC
Alibaba to launch AI-powered glasses creating a Chinese rival to Meta
Alibaba on Monday unveiled a pair of smart glasses powered by its artificial intelligence models, marking the Chinese firm's first foray into the product category. The e-commerce giant said the Quark AI Glasses will be launched in China by the end of 2025 with hardware powered by the firm's Qwen large language model and its advanced AI assistant called Quark. The Hangzhou, headquartered company is one of the leaders in China's AI space, aggressively launching new models with capabilities that compete with Western counterparts like OpenAI. Many tech companies see wearables, specifically glasses, as the next frontier in computing alongside the smartphone. Quark, released this year, is currently available as an app in China. Alibaba is stepping into the hardware game as a way to distribute the app more widely. The Quark AI Glasses are Alibaba's answer to Meta's smart glasses that were designed in collaboration with Ray-Ban. The Chinese tech giant will also now compete with Chinese consumer electronics player Xiaomi who this year released its own AI glasses. Alibaba said its glasses will support hands-free calling, music streaming, real-time language translation, and meeting transcription. The glasses also feature a built-in camera. Alibaba owns a range of different services in China from mapping to an online travel agent. Its affiliate company Ant Group also runs the widely-used Alipay mobile service. Alibaba said users will be able to use a navigation service via the glasses, pay with Alipay and shop on Taobao, its China e-commerce platform. The firm has yet to release other details such as the price and technical specifications.
Business Insider
42 minutes ago
- Business Insider
Alibaba's Jian says most current AI tech will be gone in decade, Bloomberg says
Wang Jian, the founder of Alibaba's (BABA) cloud and AI unit, believes nine-tenths of the technology and services that have appeared since Microsoft-backed (MSFT) OpenAI's ChatGPT started a revolution in AI will be gone in under a decade, Annabelle Droulers and Lauren Faith Lau of Bloomberg reports. 'Probably 90% of the AI people are talking about, I would say, will go away in five or 10 years because it's not really the essence of this technology,' Jian said, according to Bloomberg. 'But that's not bad, and it just helps us to explore.' Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Business Insider
an hour ago
- Business Insider
China says it wants the world to work together to govern AI. The US, not so much.
At this weekend's World Artificial Intelligence Conference in Shanghai, boxing robots thrilled the crowd. But the real heavyweight bout is between the US and China over the future of AI. The theme of the Shanghai conference, which was organized in part by the Chinese government and lasts until Monday, is "global solidarity in the AI era." In his keynote address, Chinese Premier Li Qiang called for a new global organization to coordinate responses to AI advancements. "Overall, global AI governance is still fragmented. Countries have great differences, particularly in terms of areas such as regulatory concepts, institutional rules," he said, speaking in Chinese. "We should strengthen coordination to form a global AI governance framework that has broad consensus as soon as possible." Li's pitch contrasted with comments made by US President Donald Trump earlier in the week. On Wednesday, the US president released his " AI Action Plan" and signed three executive orders. All of them, Trump said, were designed to free AI companies from regulatory burdens. "From this day forward, it'll be a policy of the United States to do whatever it takes to lead the world in artificial intelligence," he said before signing his executive orders. Trump's doctrine will likely benefit American AI companies. Many of them, like OpenAI, Meta, and Google DeepMind, submitted recommendations to the president and praised the new policies. However, it's an open question whether forgoing stricter regulations in the United States will benefit humanity. AI industry leaders have long warned about the threats AI could pose — everything from disinformation and economic inequality to total loss of all human control. In 2023, a group of prominent AI scientists, including OpenAI CEO Sam Altman, Google DeepMind CEO Demis Hassabis, and Anthropic CEO Dario Amodei, signed a one-sentence statement calling for AI regulation. "Mitigating the risk of extinction from AI should be a global priority alongside other societal-scale risks such as pandemics and nuclear war," it said. Altman said last year that AI could have a "negative impact way beyond the realm of one country." He said the tech should be regulated by an "international agency looking at the most powerful systems and ensuring reasonable safety testing." One way to do that is through an agreed-upon global framework similar to the Nuclear Nonproliferation Treaty, which is enforced by the United Nations and which all but four countries have signed. The UN tech chief, Doreen Bogdan-Martin, told the AFP on Saturday that the world urgently needed a global deal to regulate AI. "We have the EU approach. We have the Chinese approach. Now we're seeing the US approach. I think what's needed is for those approaches to dialogue," she said. The Trump administration, however, is likely to hinder any such international agreement. Beyond its own effort to loosen restrictions at home, it has largely dismissed other global collaborations in favor of its America First policy. At the Shanghai conference, Geoffrey Hinton, a computer scientist known as the Godfather of AI, said international cooperation on AI would be difficult. He said few countries agree on basics like how misinformation should be policed. He said there was one subject, however, on which the whole world seems aligned: Humans should not let AI supersede their control. "So on that particular issue, it should be easy to get international collaboration," he said at the conference, adding, however, that it "may be difficult with the current US administration." "But rational countries will collaborate on that," he said.
