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Alibaba Stock Gains Momentum, What’s Next?
Stock Analysis & Ideas

Alibaba Stock Gains Momentum, What’s Next?

2022 has started on a healthy note for Alibaba (NYSE:BABA) shareholders. Shares of this e-commerce giant are up over 11% after losing a substantial portion of its value in 2021. 

While Alibaba stock appreciated, TipRanks’ data shows that investors and hedge funds continue to maintain a negative outlook on Alibaba’s prospects. 

Per the TipRanks’ Stock Investors tool, 6.9% of investors holding portfolios on TipRanks have reduced their exposure to Alibaba stock in the last 30 days. Furthermore, 1.8% of these investors cut their holdings in BABA stock in the last seven days.

Similarly bearish are hedge fund managers. TipRanks’ Hedge Fund Trading Activity tool shows hedge funds have offloaded 1.3 million Alibaba shares in the last three months.

While investors and hedge funds are reducing their stakes, Sophie Huang of CMB International Securities maintained a bullish outlook on Alibaba stock. However, Huang lowered the price target on Alibaba stock to $181.60 from $213. 

Huang expects Alibaba’s Q3 results to remain challenged amid macro challenges and a moderation in the domestic consumption growth rate. Further, the analyst expects Alibaba’s cloud revenue growth rate to decelerate. 

Along with Huang, Citigroup analyst Alicia Yap also reduced her price target on Alibaba stock. 

What’s Ahead?

While Alibaba stock is trading relatively cheap due to the massive decline in its price, regulatory concerns and macroeconomic headwinds could continue to play spoilsport and hurt Alibaba’s near-term financial performance. Also, increased competitive activity could remain a drag. 

Despite near-term concerns, most Wall Street analysts maintain a bullish view of Alibaba stock. Alibaba continues to invest and expand into new addressable markets. Moreover, digitization provides strong growth opportunities for its cloud business. 

On TipRanks, Alibaba has received 21 Buys and 3 Holds for a Strong Buy consensus rating. Further, the average Alibaba price target of $196.98 indicates 49% upside potential to current levels.

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