BofA Securities has reaffirmed its bullish stance on Alibaba, maintaining a "Buy" rating with a target price of $172 per US-listed share and HK$168 for its Hong Kong-listed stock.

In a fresh research note, the bank highlighted the company's newly announced Hong Kong share placement, which aims to raise HK$80 billion, with proceeds fully directed toward advancing full-stack artificial intelligence capabilities and related infrastructure development. Following the raise, Alibaba's net cash position is set to climb from approximately $31 billion to over $41 billion.

The bank acknowledged that the placement could weigh on market sentiment in the near term, as investors may focus on immediate dilution effects, rising depreciation tied to AI infrastructure buildout, uncertainty over how long elevated capital expenditure will persist, and the potential need for further external funding.

Still, BofA Securities views the move through a positive lens. It underscored management's strong growth guidance for the cloud business, improving economics around AI investments, and a sequential recovery in free cash flow. The placement is framed as a financing strategy that supports expansion, diversifies funding sources, and bolsters the balance sheet ahead of time.