On Thursday, Jefferies analyst Thomas Chong increased the stock price target for Alibaba (NYSE:BABA) Group Holding Limited (NYSE:BABA) shares to $144 from the previous target of $143, while reiterating a Buy rating on the stock. Chong's optimism is rooted in the company's expected performance for the December quarter, bolstered by strategic clarity.
The analyst anticipates Alibaba to stay on course with its December quarter execution, citing the success of the "Double-11" shopping event as a key driver for the growth in Gross Merchandise Volume (GMV) year-over-year (YoY) for the company's Taobao and Tmall platforms, known collectively as TTG.
This growth is also expected to be supported by an acceleration in Customer Management Revenue (CMR), benefiting from the Qianxiang Zhutong (QZT) platform and a full quarter's contribution of service fees. This comes despite the rapid expansion of Alibaba's businesses with lower take rates.
For Alibaba's Automated Digital Customer (AIDC) services, Chong has maintained his projections, considering the peak season during the quarter. Furthermore, he forecasts that Alibaba's Cloud revenue will experience a YoY acceleration, driven by robust demand for artificial intelligence (AI) services.
Chong's updated price target reflects a modest increase, underscoring his confidence in Alibaba's ability to meet its targets and capitalize on its strategic initiatives. The analyst's commentary highlights key areas of growth for Alibaba, including e-commerce and cloud computing, which are expected to contribute to the company's overall performance.
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