Analyst initiates Alibaba stock with a Street-high price target

Alibaba (NYSE: BABA) received renewed support on Wednesday, April 29, when BNP Paribas initiated coverage on the stock with an “Outperform” rating and a price target of $209. 

The new target, which suggests an upside potential of roughly 58%, was built on the thesis that Alibaba’s cloud revenue growth could accelerate as the company improves monetization in artificial intelligence (AI). 

More specifically, AI-related capital expenditures are expected to increasingly translate into recurring cloud revenues over time as enterprises scale their AI workloads.

From the analyst perspective, this signals a shift in how the market may value Alibaba going forward. Namely, rather than focusing purely on infrastructure expansion, investors are likely to prioritize return on AI investment. 

AliBaba’s AI efforts ramp up

Beyond cloud services, Alibaba’s broader ecosystem is also showing other signs of AI-driven monetization opportunities, some of which have already resulted in rallies this month.

For example, Alipay has launched an “AI Pay-Per-Call” feature designed to simplify payments for AI agents and usage-based services. In addition, AI-powered payment functionality is being integrated into automotive environments, enabling voice- or service-driven actions to directly trigger transactions.

AI deployment is also expanding beyond traditional cloud infrastructure. Notably, the company’s AI models are increasingly being integrated into vehicles, while reports from affiliated ecosystems indicate a growing number of cars equipped with assisted-driving systems. 

For investors, this is significant because such integrations typically create scalable data and software monetization opportunities, which are key conditions for long-term AI-driven revenue expansion.

Is Alibaba stock a buy?

While Alibana shares are up roughly 8.7% this month, the year-to-date decline of nearly 16% indicates that the company’s transformation narrative mentioned by BNP Paribas is yet to be fully priced in.

Going forward, Alibaba’s share performance will likely depend on whether its cloud and AI initiatives begin to produce consistent, quantifiable results in upcoming quarters.

Currently, BABA shares enjoy a ‘Strong Buy’ Wall Street consensus based, with the average price for the next 12 months sitting at $182.29, according to the latest data available on TipRanks.

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