Alibaba Shares Surge as AI and Cloud Business Fuel Analyst Optimism

After being perceived as a sluggish giant past its prime, Alibaba is now capturing Wall Street’s attention with a remarkable resurgence. The catalyst? Breakthroughs in artificial intelligence and cloud computing that have prompted several major financial institutions to significantly raise their price targets for the Chinese tech conglomerate.

Analyst Upgrades Signal Strong Confidence

The most dramatic revision came from JPMorgan Chase, which elevated its price target from $170 to $245—a substantial 44% increase. This bullish stance stems from observed improvements in Alibaba’s cloud division performance and heightened management confidence in future investments.

This sentiment is echoed across the financial sector:
* Jefferies boosted its target from $178 to $230
* Erste Group upgraded its rating from “Hold” to “Buy”
* Bank of America set a $195 price objective
* CLSA maintained a $200 target

Market response was immediate and positive, with Alibaba shares advancing 4.6% and 2.2% following these upgrades, demonstrating investor appetite for positive developments.

Should investors sell immediately? Or is it worth buying Alibaba?

Cloud Division Emerges as Growth Engine

At the heart of this renewed optimism lies AliCloud, Alibaba’s cloud computing arm. The division reported impressive 26% growth in the second quarter of 2025, marking the eighth consecutive quarter of triple-digit expansion in AI-driven revenues.

The strategic integration of cloud services with artificial intelligence capabilities is creating significant competitive advantages for Alibaba. JPMorgan has consequently raised its revenue projections for fiscal years 2027 and 2028, anticipating broader adoption of generative AI technologies.

Technical Indicators Suggest Potential Pause

Despite the enthusiastic market reception, technical analysis reveals potential headwinds. The stock’s rapid ascent has pushed it into overbought territory, with the Relative Strength Index reaching 76.1—a level that historically indicates possible consolidation or pullback.

The magnitude of recent gains is noteworthy: shares have surged approximately 39% over the past month alone, with year-to-date advances exceeding 120%. This extraordinary performance trajectory may give even bullish investors reason for caution as they assess sustainability.