China-based Alibaba Group Holding Limited (HK:9988) faced various headwinds in 2023, as the expected economic recovery in China did not materialize as anticipated. The stock fell by nearly 25% last year. Despite this, analysts maintain a bullish stance on Alibaba stock and foresee a potential growth of 66% in the share price.
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Alibaba is a Chinese technology company widely known for its online marketplace.
Alibaba’s Struggles in 2023
Alibaba experienced multiple challenges in 2023, such as falling domestic sales, increased competition, and uncertainty surrounding its plans to spin off its business units.
Shares gained some momentum in March 2023 after Alibaba announced its plan to spin off the company into six business groups. However, this uptick was short-lived, and the stock exhibited volatility thereafter. In November, the stock experienced a sharp decline when the company announced the termination of its intended spin-off of the cloud computing business, citing the U.S. chip export restriction.
Analysts Remain Bullish
Alibaba stock continues to decline in 2024, with a recovery appearing challenging. The Chinese economy remains subdued, and the company is losing its market share to PDD Holdings (NASDAQ:PDD). That said, most analysts covering the stock remain bullish about its prospects.
On Wednesday, analyst Tsz Wang from DBS reiterated a Buy rating on the stock, predicting an upside of 88%. Wang expects the company’s international commerce and cloud business to be the main factors contributing to its growth.
Alibaba is actively focused on its international commerce segment, which includes AliExpress, Lazada, and Trendyol. Wang anticipates a 25% annual increase in the company’s international revenue until FY26. In the cloud business, the analyst expects a growth of 6% annually during the same period, driven by AliCloud’s solid customer base. Currently, AliCloud boasts a leading position in China’s cloud services market, commanding an impressive 37% market share.
Two days ago, analyst Ellie Jiang from Macquarie also confirmed a Buy rating on the stock, forecasting over a 23% increase in the share price.
Is Alibaba Stock a Good Buy Right Now?
On TipRanks, 9988 stock has received a Strong Buy consensus rating from analysts based on six Buys and one Hold recommendation. The Alibaba share price target is HK$117.61, which implies a growth rate of 66% from the current trading levels.
