Alibaba Stock Jumped 11%, Yet Wall Street Cut Its Price Targets

Alibaba stock (NYSE: BABA) jumped about 11% on July 8 to nearly $109, its best single day in 10 months.

The pop followed a pre-earnings update showing its cash-losing delivery business improving and profits holding steady. Yet even as buyers rushed in, several big banks quietly trimmed their price targets.

Why Alibaba Stock Suddenly Popped

The trigger was a pre-earnings briefing. Alibaba said losses in its instant-commerce business, its money-losing quick-delivery arm, narrowed last quarter while overall profit stayed stable.

Note: Alibaba is a Chinese company, but BABA is its US-listed stock, an American depositary share (ADR) that trades in New York in dollars. That is the price this analysis follows.

Two other forces helped. Its cloud unit keeps growing fast on AI demand, and a US court win eased fears that Washington could punish or delist the stock.

That optimism spread across US-listed Chinese tech. As traders sold Korean and Taiwanese chipmakers, they rotated into Chinese internet stocks, lifting Alibaba’s US-listed peers JD.com (NASDAQ: JD) and Baidu (NASDAQ: BIDU) too. As the group’s heavyweight, Alibaba caught that wave, on hopes China’s e-commerce slump is bottoming.

But the pros (analysts) were not as excited as the tape.

The Hidden Catch, Buy Ratings but Lower Targets

Here is the twist. As the stock surged, Morgan Stanley cut its price target to $180 from $190, Citi to $192 from $208, Daiwa to $175 from $200, and HSBC to $170 from $176. All kept a “Buy.”

Why cut and stay bullish at once? A price target is a bet on future profit. Alibaba is spending heavily on AI, which eats into near-term earnings, while cautious Chinese shoppers keep its core advertising and commerce revenue soft.

More spending plus softer sales means a lower fair value today, even if the long-term AI story stays intact. So the analysts still like Alibaba, but they expect less upside than before. The crowd is buying the bounce while the Wall Street pros quietly lower the ceiling.

What the Tape Is Saying

The buying looks real, not just hype. The Chaikin Money Flow (CMF), a proxy for institutional money flow, has climbed since June 16 even as the price fell to its low. That positive divergence suggests quiet accumulation.

Volume backs it up, spiking near 39 million shares on the jump. Options lean bullish too, with the put-call ratio, a measure of bearish bets against bullish ones, sitting below 1 on both volume (0.37) and open interest (0.58).

Still, the rebound is charging straight toward the zone where the stock broke down in June.

Alibaba Stock Price Levels to Watch

Alibaba stock price has trended lower since early May, and this bounce began from around the $92 zone, near its 52-week low. All levels here are the US-dollar figures for BABA.

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To keep the recovery alive, BABA needs to reclaim $109.86 and hold the $110 zone. The key wall sits near $112.89, only about 4% higher. A clean break there opens the path to $122.33 and then $147.09.

If $112.89 rejects the price, the bounce fades. Support then sits at $96.82, with room lower if that breaks. The $112.89 level separates a real recovery from another slide back toward $97.

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