Morgan Stanley has lowered its price target on Alibaba (NYSE:BABA) to $150.00 from $180.00 while maintaining an Overweight rating on the stock.

US-listed shares of Alibaba sank 3.9% on Wednesday.

The firm cited approximately 10 billion yuan in instant commerce investments as a key factor in the target reduction, noting these investments could potentially peak at around 20 billion yuan in the fiscal second quarter. The $245 billion market cap company maintains healthy financials with a P/E ratio of 15.24 and revenue growth of 5.86% over the last twelve months.

Morgan Stanley expects Alibaba’s consolidated EBITA to fall 16% year-over-year in the fiscal first quarter, with the company’s TTG and local services EBITA projected to decline by 20%.

The firm forecasts Alibaba’s cloud revenue growth at 22% year-over-year, highlighting this as a positive aspect of the company’s business performance.

Despite the price target reduction, Morgan Stanley continues to view Alibaba as the "best AI enabler" in its coverage universe, maintaining its preference ranking of "BABA>Meituan>JD."

In other recent news, Alibaba Group Holding Limited reported mixed fourth-quarter results, with revenues falling short of expectations, while profitability exceeded projections. Despite this, Alibaba’s core commerce and cloud computing segments demonstrated strong growth, with customer management revenue increasing by 12% year-over-year. Analysts from Susquehanna, Benchmark, and Morgan Stanley have maintained positive ratings on Alibaba, highlighting the company’s strategic investments in artificial intelligence (AI) and its robust market position. Susquehanna reiterated a Positive rating with a $175 target, citing Alibaba’s growth potential in China’s e-commerce landscape. Benchmark adjusted its price target to $176, maintaining a Buy rating, while Morgan Stanley kept an Overweight rating with a $180 target, anticipating further growth in Alibaba’s cloud revenue. The company’s focus on AI is expected to enhance its services and expand market reach, with particular emphasis on leveraging AI inference demand. These developments underscore Alibaba’s ongoing efforts to strengthen its market position and capitalize on emerging technology trends.

Meanwhile, On July 9, 2025, Alibaba announced the completion of its private offering of HK$12.023 billion aggregate principal amount of Zero Coupon Exchangeable Bonds due 2032 by reference to the ordinary shares of Alibaba Health Information Technology Limited that are listed on The Stock Exchange of Hong Kong Limited. The Bonds were sold to certain non-U.S. persons in offshore transactions outside the United States in reliance on Regulation S under the U.S. Securities Act of 1933, as amended.