Why Alibaba Stock Is Falling Today

Source Motley_fool

Shares of the large Chinese e-commerce and tech company Alibaba Group (NYSE: BABA) traded nearly 3% lower as of 12:47 p.m. ET today for no obvious reason, but likely due to the broader market sell-off after new inflation data this morning. A Wall Street analyst also lifted his price target on the stock on Friday.

AI progress is impressive

Stocks across the board were reeling today after the Federal Reserve's preferred gauge for inflation, the Personal Consumption Expenditures index, rose 0.4% in February from the prior month and came in 2.8% higher year over year. Both numbers were slightly above estimates, raising concerns about higher inflation.

Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »

Meanwhile, Mizuho analyst James Lee maintained an outperform rating on Alibaba and upped his price target from $140 to $170, citing strong progress in the company's artificial intelligence (AI) strategy. Lee also believes that the company's AI spending will result in better product recommendations and therefore more products sold.

Lee also boosted his revenue outlook for Alibaba's cloud division in the fiscal year 2026 from 13% growth to 17% year over year. He arrives at a $170 price target by applying a 12 multiple on earnings before interest, taxes, depreciation, and amortization, which he increased from 10 due to better visibility into the company's product road map and better sentiment related to enterprise spending in China.

Chinese equities look more appealing

Due to more support from the Chinese government, potential future stimulus, and more belief in AI innovation in the country, Chinese tech stocks certainly look appealing.

Their valuations are also more attractive, with Alibaba trading at less than 15 times forward earnings. However, if you invest, do so for the long term and prepare for volatility, as sentiment around the regulatory landscape and economy can change quickly and result in volatility.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

  • Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $288,966!*
  • Apple: if you invested $1,000 when we doubled down in 2008, you’d have $42,440!*
  • Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $526,737!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

Continue »

*Stock Advisor returns as of March 24, 2025

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
WTI drifts higher above $69.00 on Venezuela supply worriesWest Texas Intermediate (WTI), the US crude oil benchmark, is trading around $69.15 during the early Asian session on Wednesday.
Author  FXStreet
3 Month 26 Day Wed
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $69.15 during the early Asian session on Wednesday.
placeholder
GameStop's plan to issue $1.3 billion convertible notes to buy Bitcoin could boost crypto market and meme coinsVideo game retailer GameStop announced on Wednesday that it plans to issue senior convertible note offerings worth $1.3 billion.
Author  FXStreet
3 Month 27 Day Thu
Video game retailer GameStop announced on Wednesday that it plans to issue senior convertible note offerings worth $1.3 billion.
placeholder
Crude oil price today: WTI price bearish at European openingWest Texas Intermediate (WTI) Oil price falls on Thursday, early in the European session.
Author  FXStreet
3 Month 27 Day Thu
West Texas Intermediate (WTI) Oil price falls on Thursday, early in the European session.
placeholder
Crude oil price today: WTI price bearish at European openingWest Texas Intermediate (WTI) Oil price falls on Thursday, early in the European session.
Author  FXStreet
3 Month 27 Day Thu
West Texas Intermediate (WTI) Oil price falls on Thursday, early in the European session.
placeholder
GameStop's plan to issue $1.3 billion convertible notes to buy Bitcoin could boost crypto market and meme coinsVideo game retailer GameStop announced on Wednesday that it plans to issue senior convertible note offerings worth $1.3 billion.
Author  FXStreet
3 Month 27 Day Thu
Video game retailer GameStop announced on Wednesday that it plans to issue senior convertible note offerings worth $1.3 billion.
goTop
quote