Goldman Sachs reiterates its "buy" rating on BABA-W (09988) with a target price of 180 Hong Kong dollars.

Goldman Sachs released a research report stating that Alibaba's (09988) performance in the third quarter of the 2026 fiscal year was weaker, with overall revenue increasing by 2% year-on-year and group EBITA decreasing by 57% year-on-year, but the main business lines generally met expectations. E-commerce customer management revenue increased by 1% year-on-year, in line with the bank's expectations; cloud business revenue increased by 36% year-on-year, with an EBITA profit margin of 9%, also in line with expectations. The main deviation from performance and expectations was due to increased investments in the Taomi Qianwen model and consumer applications during the quarter. Goldman Sachs maintained a "buy" rating on Alibaba, with a target price of 180 Hong Kong dollars, based on the SOTP valuation method. The report pointed out that positive factors in the performance include: AI revenue achieving triple-digit growth for the tenth consecutive quarter; external cloud revenue accelerating to 35%; AI-driven capital expenditures remaining at the level of 29 billion yuan. Management also detailed Alibaba's AI infrastructure and full-stack AI layout, emphasizing the rapid expansion of the Taomi Qianwen model family, the Pingtouge chip, and the progress of the Taomi Qianwen consumer AI application. The bank expects the market to focus on several key points at the performance meeting, including: the newly established Alibaba Token Hub business unit and the Taomi Qianwen model strategy, the positioning of AI applications in AI agency opportunities, cloud growth and capital expenditure trajectory, and return on investment, the strategy for Taomi Qianwen consumer AI applications, the path to improving unit economics in the instant retail business, and Taotian Group's strategies for addressing weak customer management revenue and profit margin trends in 2026.