Shares of Alibaba climbed as much as 4.4% in Buenos Aires trading after BofA Securities raised its price target on the U.S.-listed stock to $178 from $175 while keeping its Buy rating, pointing to improving profitability in the company's cloud-computing and artificial-intelligence divisions. The modest target bump lands amid a broader debate: whether Alibaba's heavy AI spending is finally translating into earnings power. Alibaba Gets Another Bullish Nod From Wall Street — But Is a $3 Price-Target Bump Enough to Reflect an AI Transformation?
Shares shifted higher as BofA Securities lifted its Alibaba price target to $178 from $175, maintaining a Buy rating and citing strengthening profitability in the company's cloud and artificial-intelligence businesses. The move adds to a wave of analyst optimism — Citigroup raised its target to $193 and Jefferies reiterated Buy at $192 in just the past two days — yet Alibaba's U.S.-listed shares still trade around $106, a steep discount to consensus targets. The question for shareholders: is the market pricing in real risk, or simply sleeping on one of China's fastest AI pivots?
• Cloud Revenue Is Growing at a Pace That Demands Attention. In the June quarter, Alibaba's cloud and computing-services revenue hit $7.1 billion, up 45% year-over-year — the fastest growth in 22 quarters.
Cloud-segment operating profit surged 133% to $830 million, pushing margins to roughly 12%. That margin expansion is the core of BofA's thesis: every percentage point of improvement on a $23-billion-a-year cloud business drops meaningful profit to the bottom line.
• AI Products Are the Engine Inside the Engine. AI-related product revenue reached $1.8 billion in the quarter — its twelfth consecutive quarter of triple-digit year-over-year growth.
AI-related products now account for 30% of all cloud-segment revenue , up from a negligible share two years ago. BofA's modest target increase likely reflects confidence that this mix shift will keep widening margins without requiring proportionally more spending.
• A $10 Billion Capital Raise Looms Over the Story. Alibaba recently placed 710 million new shares, raising roughly $10.3 billion earmarked entirely for AI infrastructure.
BofA acknowledged the dilution and rising depreciation costs may weigh on near-term sentiment , which helps explain why the target crept up only $3 rather than leaping with the revenue trajectory.
• Wall Street Is Bullish, but the Stock Hasn't Followed. The average analyst target now sits at $183.44 across 21 firms , implying more than 70% upside from the current U.S. price near $106. The stock's 52-week range of roughly $92–$183 shows investors have been willing to pay much more — and much less. Geopolitical overhang and China's uneven economic recovery remain the discount the market applies, regardless of how fast AI revenue compounds.