Alibaba Group Holding Limited (NYSE:BABA) was downgraded by Freedom Capital to “Hold” from Buy, with a price target of $180. The downgrade follows quarterly results showing rising capex and cost pressures outweighing cloud momentum. Despite retail business growth, analysts emphasize BABA’s ability to expand operations without increased costs will determine future performance.

Alibaba reported strong quarterly results, with its cloud segment driving growth but at the expense of mounting capital expenditures. Analysts caution that uncertain payback prospects from these expenditures could impact the stock’s performance. The firm noted how BABA’s ability to expand retail and cloud operations without significant cost increases will be crucial in upcoming quarters.

Freedom Capital lowered its rating on BABA to “Hold” and raised the price target to $180. The company’s ability to balance retail and cloud expansion without escalating costs will be a key factor in its future performance. While acknowledging BABA’s investment potential, analysts believe other AI stocks offer greater upside potential with lower downside risk.

Read more at Yahoo Finance.: Freedom Capital Downgrades Alibaba (BABA) Despite Raising Price Target to $180