Alibaba’s Stellar September Performance and Cloud Growth Prospects

Alibaba's shares surged nearly 50% in September, outperforming the Hang Seng Tech Index. Morningstar revised its fair value estimate for Alibaba’s American Depositary Receipts upward by 49% to $267, with Hong Kong-listed shares pegged at HK$260. Morgan Stanley followed suit, raising its ADR price target by 21% to $200.

The Hong Kong-listed stock climbed as much as 4.1% to HK$173 during Monday’s session, cementing its position as the top performer on the Hang Seng Tech Index this month. Morningstar analyst Chelsey Tam noted the shares remain undervalued, citing robust cloud revenue drivers: overseas data center investments, competitive wins, widespread adoption of open-source models, and in-house chip advancements.

Morgan Stanley turned bullish on Alicloud after Alibaba’s Hangzhou conference, where the company unveiled heightened AI spending and a strategic tie-up with Nvidia. Analysts Gary Yu and team lifted cloud growth projections to 32% for fiscal 2026 and 40% for 2027, fueled by capital expenditures, model upgrades, partnerships, and global market expansion.