Goldman Sachs Reaffirms Confidence in Alibaba with HK$180 Target

In a recently published research report, Goldman Sachs expressed continued optimism regarding the future prospects of Alibaba Group-SW (09988.HK). The firm not only reiterated its "Buy" rating but also set a target price of HK$180, underscoring a strong conviction in the company's long-term value.

AI and Cloud Computing: The Twin Engines for Future Growth

The analysis highlights Alibaba's core competitive edge, positioning its strategic investments in Artificial Intelligence (AI) and cloud computing at the forefront of the industry. The company's clear "Model-as-a-Service" (MaaS) roadmap aims to unlock new commercial value by democratizing AI capabilities, which is identified as a primary growth driver for the coming years.

Financial Outlook: Robust Earnings Growth Projected

Goldman Sachs provides a positive forecast for Alibaba's financial performance:

  • Fiscal Year 2027: Earnings per share (EPS) is projected to grow by approximately 32%.
  • Fiscal Year 2028: EPS growth is expected to accelerate further to around 54%.
This optimism is primarily fueled by the anticipated acceleration in cloud revenue growth and a continued narrowing of losses in related business segments.

Market Valuation: AI Potential Not Fully Priced In

The report emphasizes a key point: despite Alibaba's significant advancements and investments in AI, the current market valuation does not fully reflect the long-term growth potential and commercial prospects embedded in this strategic area. This suggests there may be room for a potential re-rating of the stock for investors.