Alibaba Jumps 3% Premarket: Barclays Sees Strong Cloud Growth, Instant Commerce Woes Ending

The recent rally in Alibaba shares may have offset the losses incurred earlier this year, when U.S. tariffs and high investment in the Chinese food-delivery space weighed on the stock. Still, retail investors and analysts have mixed views on the stock.

Alibaba's U.S.-shares rose about 3% in premarket trading on Tuesday, after the company's Hong Kong shares (9988) rose 3.6% to hit a nearly four-year high.

On Monday, Barclays raised its price target on BABA shares to $190 from $145, signaling a 35% upside, and maintained its overweight rating.

The investment research firm warned that weakness in its instant commerce segment might peak in the September quarter, while the cloud unit growth is expected to accelerate in the coming quarters.

Cloud revenue grew 26% in the last quarter, easily beating the 18.4% consensus estimate, helping offset the soft performance in the core e-commerce business. BABA shares have gained over 23% since its quarterly report late last month.

However, the views of retail traders are mixed. The sentiment for BABA on Stocktwits shifted lower to 'bearish' as of early Tuesday, from 'neutral' the previous, with investors particularly clued in to the moves in the remainder of this week.

"No resistance until 145 - 147 level", forecast one user.

Alibaba has accelerated the rollout of new AI tools, which is translating into gains for its cloud business and investment in new technologies. Earlier this week, Alibaba's cloud unit led a $100 million investment round in Chinese robotics startup X Square Robot.

BABA shares are up 67.8% year-to-date.

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