Alibaba shares received a boost last week thanks to news founder Jack Ma, who is pleased with the company’s improvement so far. This comes after co-founder and current chairman Joe Tsai told CNBC in late February that he felt much more “confident” in Alibaba’s ability to continue to be a leading e-commerce player. Ma stepped down as chairman in 2019. Wall Street analysts expect the business to grow, but last week several of them cut their price targets for the stock. Their common concern is how much Alibaba will spend in the near future on future growth. JPMorgan lowered its earnings forecasts based on Alibaba’s “increasing commitment to investing in its core operations: domestic/cross-border e-commerce and cloud,” China internet analyst Alex Yao and his team said in an April 9 report. They lowered their price target to $100 per share. up from $105 previously, while maintaining an “outperform” rating. The new price target is still about 33% higher than Alibaba’s U.S.-listed shares closed Thursday. The shares fell over a difficult period of about 12 months during which the company shook up its leadership by restructuring into six divisions with the aim of spinning off – “to unlock shareholder value”. The company, one by one, canceled plans to IPO its cloud business and then its logistics unit Cainiao. “The first thing we did was admit mistakes,” Tsai said in an interview with Norges Bank Investment Management CEO Nicolai Tangen, according to a video published April 3. The firm says it owns a 2% stake in Alibaba. “We have acknowledged in the past that we may not have focused on our [shopping app] “The second thing is to reorganize our staff, change the organizational structure that matches the strategy.” Eddie Wu became CEO of Alibaba in September and is also acting head of the cloud business. He succeeded Trudy Dye. as head of Taobao and Tmall’s e-commerce division in December, Daniel Zhang, the company’s former CEO, abruptly left the company instead of staying on to lead the cloud as originally planned: “BABA’s financial performance should remain weak in the near future. several quarters, given the steady investment of users in Taobao Tmall and [Alibaba International Digital Commerce] investments,” UBS analyst Kenneth Fong and his team said in an April 9 report. “More significant upside potential is likely to emerge in the second half if the macroeconomic recovery gains momentum and more concrete financial results are demonstrated as a result of the new business strategy,” UBS said. They lowered their price target by $1 to $105 per share and maintained a buy rating. Competition remains fierce in Alibaba’s core businesses. PDD Holdings’ Pinduoduo app and ByteDance’s Douyin, the local version of TikTok, have emerged as Alibaba’s two main competitors. In the relatively new field of generative artificial intelligence, the company has spearheaded rapid industry growth in China, Nomura said, citing Doubao data. about 3.7 million users as of the end of March, more than twice as many as Alibaba’s Tongyi Qianwen AI chatbot, data showed Baidu’s Ernie bot was in second place with about 2.5 million active users per day. According to the data, in terms of average daily time spent at work, Dubao remains first with 8.4 minutes, while Alibaba’s Tongyi Qianwen ranks second with 7.7 minutes as of the end of March. Alibaba is also integrating artificial intelligence tools and models into its e-commerce and cloud businesses. However, in Tsai’s interview with Norges Bank Investment Management, the Alibaba executive said he estimates China is about two years behind the U.S. in terms of artificial intelligence development. AI monetization was also barely mentioned in six research reports published last week on Alibaba. “We take a conservative view on BABA as the business transformation will likely take time,” Morgan Stanley analyst Gary Yu and his team said in an April 10 note. buy ratings, evaluate shares equal weight. — CNBC’s Michael Bloom and Arjun Harpal contributed to this report.
