Alibaba Stock Jumps Double Digits as AI Boom Supercharges Cloud Growth
Sep 1 - Alibaba Group Holding 
BABA saw its Hong Kong-listed shares jump nearly 19% on Monday as excitement around artificial intelligence (AI) lifted demand for its cloud services. The surge highlights how the AI boom continues to reshape the cloud market and push tech firms to adapt quickly.
The company reported revenue of RMB247,652 million ($34.6 billion) for the quarter, a 2% increase from a year earlier but slightly below consensus forecasts. If sales from divested businesses Sun Art and Intime are excluded, revenue would have grown 10% year-over-year. Investors focused on the strength of Alibaba's cloud division, which posted a 26% sales increase, its best result in several quarters. Management also pointed to triple-digit growth in AI-related products, underscoring how demand for generative AI solutions is fueling momentum.
Adding to the story, The Wall Street Journal noted that Alibaba has developed a new chip more advanced than earlier versions. The company had long been one of the largest customers of Nvidia 
NVDA, but U.S. restrictions on advanced chip exports to China have prompted Alibaba and other Chinese firms to accelerate domestic chip innovation.
Is BABA Stock a Buy?
Based on the one year price targets offered by 37 analysts, the average target price for Alibaba Group Holding Ltd is $158.09 with a high estimate of $186.99 and a low estimate of $129.99. The average target implies a upside of +17.10% from the current price of $135.00.
Based on GuruFocus estimates, the estimated GF Value for Alibaba Group Holding Ltd in one year is $112.35, suggesting a downside of -16.78% from the current price of $135.00. Gf value is Gurufocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. For deeper insights, visit the forecast page.