Alibaba Group (NYSE:BABA) Shares Down 2.2% - Time to Sell?

Key Points

• Alibaba shares fell 2.2% on Thursday, trading as low as $128.09 before closing at $131.45, even as trading volume came in above average.
• Investor sentiment is being pulled in opposite directions: bullish AI/cloud developments and multiple Wall Street buy ratings support the stock, but concerns remain about weaker profitability and higher AI spending pressuring margins and free cash flow.
• Analysts still see upside from current levels, with a consensus Moderate Buy and an average price target of $188.76, while recent estimates from firms like JPMorgan and Barclays are well above the current share price.

Alibaba Group Holding Limited (NYSE:BABA - Get Free Report)'s share price fell 2.2% during trading on Thursday . The stock traded as low as $128.09 and last traded at $131.4490. 12,534,282 shares traded hands during trading, an increase of 5% from the average session volume of 11,961,619 shares. The stock had previously closed at $134.47.

Alibaba Group News Roundup

Here are the key news stories impacting Alibaba Group this week:

• Positive Sentiment: Alibaba continued to highlight rapid AI and cloud momentum, with new product announcements including its Zhenwu M890 AI chip and next-generation Qwen model, reinforcing the case that its cloud franchise could benefit from faster commercialization of AI. Alibaba unveils new AI chip in push for domestic alternatives
• Positive Sentiment: Several Wall Street firms remain constructive, with recent buy or overweight ratings and price targets well above the current trading range, suggesting analysts still see upside if AI monetization improves. Benchmark Reaffirms Buy Rating on Alibaba (BABA) Following AI Cloud Expansion
• Neutral Sentiment: The company filed its 2026 Form 20-F and continues to present itself as an increasingly AI-focused platform, but this filing does not appear to be a major near-term catalyst by itself. Alibaba Files 2026 Form 20-F, Highlights WVR Structure and Board Line-up
• Negative Sentiment: Investors are focused on Alibaba’s weaker adjusted profitability and the company’s plan to spend beyond its already large AI/cloud investment program, raising concerns that margins and free cash flow could stay pressured near term. Alibaba slides as investors digest profit squeeze and stepped-up AI spending plans

Analysts Set New Price Targets

BABA has been the topic of several recent research reports. JPMorgan Chase & Co. increased their target price on shares of Alibaba Group from $200.00 to $205.00 and gave the company an "overweight" rating in a report on Thursday, May 14th. DZ Bank cut Alibaba Group from a "buy" rating to a "hold" rating and set a $135.00 price objective on the stock. in a research note on Friday, March 20th. Arete Research raised Alibaba Group from a "neutral" rating to a "buy" rating and set a $190.00 price objective on the stock in a research note on Wednesday, January 21st. BNP Paribas Exane started coverage on Alibaba Group in a research note on Wednesday, April 29th. They set an "outperform" rating and a $209.00 price objective on the stock. Finally, Barclays raised their price objective on Alibaba Group from $186.00 to $195.00 and gave the company an "overweight" rating in a research note on Thursday, May 14th. Two research analysts have rated the stock with a Strong Buy rating, sixteen have assigned a Buy rating, four have assigned a Hold rating and one has assigned a Sell rating to the company's stock. Based on data from MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and a consensus price target of $188.76.

Alibaba Group Stock Performance

The firm has a market cap of $315.35 billion, a P/E ratio of 21.58, a price-to-earnings-growth ratio of 2.35 and a beta of 0.50. The company has a current ratio of 1.28, a quick ratio of 1.33 and a debt-to-equity ratio of 0.21. The business's fifty day simple moving average is $131.83 and its 200-day simple moving average is $148.27.

Alibaba Group (NYSE:BABA - Get Free Report) last announced its quarterly earnings results on Tuesday, March 31st. The specialty retailer reported $0.01 earnings per share (EPS) for the quarter. The business had revenue of $35.30 billion for the quarter. Alibaba Group had a net margin of 10.31% and a return on equity of 4.76%. As a group, sell-side analysts expect that Alibaba Group Holding Limited will post 6.67 earnings per share for the current year.

Alibaba Group Announces Dividend

The firm also recently announced an annual dividend, which will be paid on Monday, July 13th. Investors of record on Thursday, June 11th will be paid a $1.05 dividend. The ex-dividend date of this dividend is Thursday, June 11th. This represents a dividend yield of 72.0%. Alibaba Group's dividend payout ratio (DPR) is presently 15.60%.

Institutional Investors Weigh In On Alibaba Group

Large investors have recently made changes to their positions in the business. Capital World Investors boosted its holdings in Alibaba Group by 7.7% in the fourth quarter. Capital World Investors now owns 6,505,165 shares of the specialty retailer's stock valued at $953,527,000 after acquiring an additional 466,847 shares in the last quarter. Northwestern Mutual Wealth Management Co. boosted its position in Alibaba Group by 7,680.3% during the 4th quarter. Northwestern Mutual Wealth Management Co. now owns 6,014,147 shares of the specialty retailer's stock valued at $881,554,000 after acquiring an additional 5,936,847 shares in the last quarter. Fisher Asset Management LLC boosted its position in Alibaba Group by 0.8% during the 4th quarter. Fisher Asset Management LLC now owns 5,335,894 shares of the specialty retailer's stock valued at $782,135,000 after acquiring an additional 42,297 shares in the last quarter. Norges Bank bought a new stake in Alibaba Group during the 4th quarter valued at approximately $594,477,000. Finally, American Century Companies Inc. boosted its position in Alibaba Group by 17.7% during the 3rd quarter. American Century Companies Inc. now owns 2,987,539 shares of the specialty retailer's stock valued at $533,964,000 after acquiring an additional 448,484 shares in the last quarter. 13.47% of the stock is currently owned by institutional investors.

About Alibaba Group

Alibaba Group Holding Limited is a Chinese multinational conglomerate founded in 1999 in Hangzhou, China, by Jack Ma and a group of co‑founders. The company built its business around internet-based commerce and related services and has grown into one of the largest e-commerce and technology companies in the world. Alibaba completed a high‑profile initial public offering on the New York Stock Exchange in 2014.

The company operates a portfolio of online marketplaces and platforms serving different customer segments: Alibaba.com for global and domestic B2B trade, Taobao for consumer-to-consumer shopping, and Tmall for brand and retailer storefronts targeted at Chinese consumers.

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