Alibaba Stock's Set to End September With a Bang. Here's Why

Alibaba sign outside of company headquarters in Shanghai, China — (Image credit: Costfoto/NurPhoto via Getty Images)

Alibaba Group Holding (BABA) stock is trading modestly higher in Monday's session, building on recent gains that have the Chinese e-commerce giant on track for its best monthly share-price performance in nearly two years.

Indeed, Alibaba stock is up more than 29% since the start of September, putting it on track for its biggest one-month gain since the 33.8% price return it generated in December 2022.

BABA began this recent run higher following the company's strong second-quarter earnings results back in mid-August. The rally intensified in mid-September after Alibaba released over 100 artificial intelligence (AI) models and a new text-to-video tool.

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More recently, shares are up more than 21% since those AI announcements, driven by reports of massive stimulus measures by the People's Bank of China, which cut its short-term interest rate and lowered the amount of capital reserves banks are required to carry, among other initiatives.

David Tepper's a fan of Alibaba stock

A bullish outlook from billionaire investor David Tepper only created bigger tailwinds for BABA stock in September.

"I thought that what the Fed did [this month] would lead to China easing, and I didn't know that they were going to bring out the big guns like they did," Tepper said in a recent interview with CNBC. "We got a little bit longer, [buying] more Chinese stocks."

Tepper went on to say that he bought a little more of "everything," including Alibaba.

Even before the post-Fed buying, Alibaba was the largest position in Tepper's portfolio at his Appaloosa Management hedge fund. BABA accounted for more than 12% of the portfolio as of June 30, according to WhaleWisdom.

What do analysts think of BABA stock?

Tepper's not the only one that's upbeat toward Alibaba stock. Wall Street is bullish on the e-commerce giant too. According to S&P Global Market Intelligence, analysts' consensus recommendation is a Strong Buy.

Financial services firm Jefferies has a Buy rating on BABA stock and a $116 price target.

"Alibaba has multiple growth drivers in the years ahead, in our view, with its core marketplace a strong cash cow that enjoys secular growth momentum amid consumption upgrade in China," said Jefferies analyst Thomas Chong in a September 19 note.

Chong went on to note that BABA is the "center of the consumption-driven economy and online shopping" in China and that its cloud computing unit has "clear market leadership as the backbone of digitalization across different industries."

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.