A ‘Top Pick,’ Says Morgan Stanley about Alibaba Stock (BABA) Ahead of Earnings

Alibaba BABA -0.41% ▼ remains one of Morgan Stanley’s favorite China tech stocks. The firm’s analyst Gary Yu reiterated an Overweight rating on Alibaba and named the stock a “Top Pick,” saying the company has a strong advantage in artificial intelligence (AI). The company is expected to report its fiscal third-quarter 2026 results on Thursday, March 19, 2026.

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Wall Street expects the company to report earnings of $1.63 per share on revenues of $42.07 billion.

Morgan Stanley Sees Alibaba as a Global AI Leader

Yu said companies that control the entire AI chain — from chips to cloud to AI models and applications — have a clear advantage. He pointed to Alphabet GOOGL +0.54% ▲ as an example in the U.S., noting that Google has built much of its AI technology in-house, which has helped it move quickly in areas such as AI search, cloud services, and generative AI tools.

Morgan Stanley believes Alibaba has built a similar structure. The company designs its own AI chips through its T-Head unit, which reduces reliance on outside suppliers and allows it to tailor chips for its own AI workloads.

Alibaba also runs Alibaba Cloud, the largest cloud provider in China and the fourth largest globally. This gives the company the computing power needed to train and run large AI models. At the same time, Alibaba has developed the Qwen family of AI models, which are widely used open-weight models. These models are now being integrated into various consumer applications.

According to Yu, this combination of chips, cloud infrastructure, AI models, and applications puts Alibaba in a strong position in the AI race. It can help the company expand computing capacity quickly, lower costs, and reduce risks linked to U.S. export controls.

Because of this integrated AI strategy, Morgan Stanley views Alibaba as a potential global AI leader and continues to see the stock as a Top Pick.

Is Alibaba Stock a Buy Now?

Wall Street remains constructive on the stock. Alibaba carries a Strong Buy consensus rating, based on eight Buy ratings and one Hold over the past three months. The average BABA price target stands at $197.86, suggesting roughly 45.18% upside from current levels.

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