Alibaba stock target raised at Morgan Stanley on cloud business strength

Investing.com -- Morgan Stanley lifted its price target on Alibaba to $200 from $165, citing accelerating growth in its cloud division and continued momentum in core operations.

The bank reiterated its Overweight rating on the stock.

“We raise our cloud growth estimates to 32% for F26 and 40% for F27, driven by increased capex, model upgrades, strategic partnerships and accelerated international expansion,” Morgan Stanley said.

The analysts highlighted a more bullish outlook for Alicloud following the company’s Apsara Conference.

“On the supply end, we increase our capex estimates to Rmb130-135bn each year over F26-28, from Rmb100bn-108bn previously, assuming 10-15GW additional datacenter capacity by 2032,” the note said.

On the demand side, Morgan Stanley pointed to “solid demand with the number of tokens doubling every 2-3 months.”

Key developments are said to have included Alibaba’s new flagship model Qwen3-Max, upgrades to its Bailian agent platform, a partnership with NVIDIA on physical AI, and the rollout of data centers in Brazil, France and the Netherlands.

Beyond cloud, the firm expects core business momentum to hold. “We expect CMR growth to be sustained at 10% in F2Q and F26, with take rates improvement and increasing contributions from quick commerce,” Morgan Stanley wrote, adding that management’s plan to halve unit economics losses by October “appears on track.”

The analysts increased revenue estimates by 1–2% for fiscal 2026 and 2027, lowered their discount rate assumptions, and raised their sum-of-the-parts valuation for Alibaba.

“We now value cloud at US$84/share (previously US$67) … We value e-comm (ex-QC loss) in our SOTP at US$120/share (previously US$93),” they said.

You May Also Be Interested In

• Boeing workers reject contract, authorize strike
• Cytek faces $56M damages award in Beckman Coulter patent case
• Kimbell Royalty closes $221.2M mineral rights acquisition