JPMorgan Cuts Alibaba Target but Keeps Bullish Call After Sharp Decline
JPMorgan reduced its Alibaba price target to $200 from $210 while retaining an Overweight rating, suggesting about 81% upside from the October 12 share price. Alibaba shares closed roughly 38% below their October 2025 high as weaker profits and heavy spending on AI infrastructure and quick commerce weighed on sentiment. Cloud revenue rose 45% in the June quarter, but normalized earnings per ADS fell about 59% in fiscal 2026 and free cash flow was negative RMB 44.7 billion.
JPMorgan analyst Alex Yao trimmed Alibaba's target to $200 from $210 on Oct. 12, keeping an Overweight rating. At a share price near $110.80, that target suggested about 81% upside. The stock had closed Oct. 9 around 38% below its Oct. 29, 2025 high of $179.97.
Alibaba's June-quarter revenue rose 9%, but adjusted EBITA fell 30%, adjusted EBITDA dropped 14%, and net income slid about 75%. Free cash flow was negative RMB 44.7 billion, versus negative RMB 18.8 billion a year earlier. AI Cloud and Compute Services revenue climbed 45%, with AI product revenue growing triple digits for a twelfth straight quarter.
The sharp drop and JPMorgan's target may shape how retail and institutional investors view Chinese tech risk, potentially affecting portfolios and funding costs. Alibaba's heavy AI and quick-commerce spending could influence cloud customers, merchants, and workers through pricing, service expansion, or cost discipline. If earnings recover, broader confidence in China's tech sector may improve; if not, caution could persist.