Bernstein SocGen Group reduced its price target for Alibaba (BABA) to $165 from $180. The firm maintained an "Outperform" rating on the stock.
This adjustment follows Alibaba's recent $10.2 billion equity raise. The company intends to fund its artificial intelligence expansion with these funds. The equity raise caused some concern among investors.
Analysts noted investors questioned the timing of the share sale. This questioning occurred despite Alibaba's significant cash reserves.
Despite these concerns and the price target cut, Bernstein's analysis suggests potential. The firm believes Alibaba's AI investments, especially in its data centers, could yield strong returns. These investments could also payback capital expenditures faster than market anticipation.