Why Is Alibaba Stock Falling In Premarket Today?

• Two major brokerages, Morgan Stanley and Jefferies, lowered their price targets on BABA, while keeping their ‘Buy’ ratings.
• The stock gained sharply last year amid strength in Chinese tech stocks, but shares retreated slightly towards the end of the year.
• Morgan Stanley analysts flagged weakness in Alibaba’s core e-commerce business due to poor consumer trends in China, while forecasting continued strength in the company’s cloud business.

Morgan Stanley and Jefferies tempered their outlook on Alibaba’s stock amid recent share-price weakness, though both continue to recommend accumulating the shares.

BABA fell 2.5% in early premarket trading on Friday. The stock had gained 5.3% the previous day.

Analysts’ Take

Morgan Stanley lowered its price target on BABA to $180 from $200, according to an investor note on Thursday, Investing.com reported. Its analysts warned that “core e-comm businesses have started to worsen, due to weak consumption” trends in China, adding that the segment “may remain under pressure in 1HF27 due to a high base.” 

They said Alibaba’s overall profitability could weaken in the near to medium term, although strength in the cloud unit is expected to continue. 

Jefferies lowered its price target on the Chinese tech giant’s shares to $225 from $231, while affirming Alibaba as a top pick in 2026 given its opportunities in artificial intelligence and cloud.

Investors Still Largely Bullish 

Alibaba rallied widely in 2025, thanks to a rapid pace of AI rollout and commitment to higher investment in the domain, although shares retreated slightly towards the end of the year.

The stock is widely watched at the moment, as China is reportedly set to allow sales of Nvidia’s H200 processor in the country. Alibaba, a top cloud computing provider, is a substantial buyer of Nvidia equipment.

On Stocktwits, the retail sentiment for BABA climbed higher in the ‘bullish’ zone, and message volume jumped from ‘high’ to ‘extremely high.’ “Breakout is imminent,“ a user posted.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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