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Business Insider
a day ago
- Business
- Business Insider
BABA vs. AMZN: Which ‘Mega-Cap' Cloud Stock Has More Upside, According to Wall Street Analysts?
Mega-cap stocks are those with a market capitalization of $200 billion or more. Most of these stocks are associated with large, well-established companies with strong track records. Due to their sheer size, mega-cap stocks are often considered safe bets during uncertain macroeconomic times. Using TipRanks' Stock Comparison Tool, we will compare Alibaba (BABA) and Amazon (AMZN) to see which mega-cap stock has more upside ahead, according to Wall Street analysts. 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. Alibaba (NYSE:BABA) Stock Alibaba is China's largest e-commerce and cloud-services company, running platforms such as Taobao, Tmall, and AliCloud. The stock has surged more than 45% this year, fueled by AI-driven cloud demand and strong momentum in instant delivery services. Recently, Alibaba has ramped up efforts in its core e-commerce business. Taobao expanded its one-hour delivery service to 50 cities, hitting over 40 million daily orders during peak campaigns. The company launched a ¥10 billion ($1.4 billion) subsidy plan to compete with and Meituan in the fast-delivery space. In addition, Alibaba merged its food delivery unit, and travel services, Fliggy, into Taobao and Tmall to strengthen its retail ecosystem. Looking ahead, the company is set to report its Q1 FY26 earnings soon. Wall Street expects Alibaba to report earnings of $2.16 per share for Q1, down 6% from the year-ago quarter. The decline could be due to the company's heavy investment in logistics and delivery. Meanwhile, analysts project Q1 revenues at $35.49 billion, up 6% year-over-year. Is Alibaba Stock a Good Buy Right Now? Mizuho's Top analyst, Wei Fang, maintained an Outperform rating but trimmed the price target from $160 to $149, citing concerns about rising competition and lower near-term profitability. According to him, rising competition in China's local commerce sector, especially in food delivery and instant retail, is beginning to hurt the company's bottom line. Overall, Wall Street has a Strong Buy consensus rating on Alibaba stock based on 13 Buys and one Hold. The average Alibaba price target of $150.09 implies about 23.78% upside potential from current levels. Amazon Stock (NASDAQ:AMZN) Amazon, the global e-commerce and cloud leader, delivered better-than-expected Q2 2025 earnings. The stock has surged about 5% so far this year, driven by strength in its cloud unit, Amazon Web Services (AWS). The company is making continuous efforts to boost spending on AI infrastructure to drive long-term growth. At the same time, Amazon is doubling down on its grocery business. It recently expanded its 'Amazon Fresh' store rollout in the U.S. and is testing faster same-day grocery delivery to strengthen its retail footprint. This move is designed to increase customer loyalty and complement its Prime ecosystem. What Is the Price Target for Amazon Stock? In response to Amazon's latest grocery push, Morgan Stanley analyst Brian Nowak highlighted that expanding the grocery selection on should help the company cut delivery costs while lowering the minimum basket size. He noted that this move is part of Amazon's broader effort to capture a larger share of the $1.5 trillion offline grocery market. Based on 44 Buys and one Hold recommendation, Amazon stock earns a Strong Buy consensus rating on TipRanks. The average AMZN stock price target of $265.22 implies 14.8% upside potential from current levels. Conclusion Wall Street remains bullish on both Alibaba and Amazon stocks. However, analysts see greater upside potential in Alibaba. The Chinese giant is betting big on instant commerce and subsidies to defend market share. Meanwhile, Amazon is expanding its grocery and AI bets to drive long-term growth. While its upside may be smaller than Alibaba's, Amazon's stable growth and strong cash flow continue to earn Wall Street's confidence.
Yahoo
09-08-2025
- Business
- Yahoo
Mizuho Reduces PT on Alibaba Group Holding Limited (BABA) Stock
Alibaba Group Holding Limited (NYSE:BABA) is one of the Most Undervalued Long Term Stocks to Buy According to Hedge Funds. On July 24, Mizuho's analyst, Wei Fang, reduced the price objective on the company's stock from $160 to $149, hinting at the growing concerns related to the profit margins. As per the analyst, increased competition in China's local commerce sector, mainly in food delivery and instant retail, is starting to impact Alibaba Group Holding Limited (NYSE:BABA)'s bottom line. An e-commerce platform displaying a wide range of products to customers online. However, the analyst was confident in Alibaba Group Holding Limited (NYSE:BABA)'s long-term outlook and maintained an 'Outperform' rating. The consumer demand remained robust during the June quarter, thanks to the promotional events and smartphone trade-in offers. For FY 2025, Alibaba Group Holding Limited (NYSE:BABA)'s user-first AI-driven strategy delivered healthy results amidst accelerated growth throughout its core businesses. Alibaba Group Holding Limited (NYSE:BABA) established a well-defined growth portfolio focused on AI + Cloud, e-commerce, and other internet platform businesses. The company continues to seize the historic opportunity offered by AI and has been ramping up its investments in AI infrastructure and advanced technologies to further strengthen Alibaba Group Holding Limited (NYSE:BABA)'s global leadership in technology. Patient Capital Management, a value investing firm, released its Q2 2025 investor letter. Here is what the fund said: 'Alibaba Group Holding Limited (NYSE:BABA) sold off early in the quarter following President Trump's 'Liberation Day' tariff announcement, which imposed ~50% tariffs on Chinese goods. As the US and China moved toward tentative agreements, the stock began to recover. Fundamentally, we continue to see an attractive setup. Alibaba is benefiting from accelerating AI initiatives, renewed momentum in its Tmall platform, and rapid growth in instant shopping and local services. These trends support a broader turnaround in core commerce and digital services. Despite these tailwinds, the company trades at just 11.2x earnings, well below historical averages, and continues to return capital to shareholders through a 1% dividend yield and a robust buyback program. We believe Alibaba remains significantly undervalued relative to its sum-of-the-parts, and see meaningful upside as fundamentals stabilize and sentiment improves.' While we acknowledge the potential of BABA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 13 Cheap AI Stocks to Buy According to Analysts and 11 Unstoppable Growth Stocks to Invest in Now Disclosure: None. This article is originally published at Insider Monkey. Inicia sesión para acceder a tu cartera de valores
