BABA is sliding again, down 4.5% on the week to $129.47, and the gap between where the stock trades and what analysts think it's worth keeps widening — yet options traders are sending the most bullish signal of the past year.
The standout this week is options positioning, and it points firmly in one direction. The put/call ratio has collapsed to 0.58, more than three standard deviations below its 20-day average of 0.66 — the most call-heavy reading in the past 52 weeks, which ranged as high as 1.07. That means call-side demand has swamped puts to an unusual degree, even as the stock drifts lower. The disconnect is sharp: price is falling, but options traders are positioning for a bounce more aggressively than at any point in the last year.
Short positioning tells a quieter story, and it is worth naming that contrast explicitly. Short interest has been grinding down — off nearly 4% over the past month to around 38.4 million shares — continuing the unwind that began well before the May 13 earnings print. The borrow market is loose: cost to borrow at 0.45% is firmly low, and availability has loosened markedly over the past week, rising from around 77% to 96%. That is a meaningful easing. More shares are now available to borrow relative to those already lent out than at any point in the past month. Short sellers who want to rebuild positions face no friction in doing so — but the data shows they are not pressing.
The Street remains bullishly anchored, though the price has continued to slip since the last round of upgrades. Following the May 13 earnings release, JP Morgan lifted its target to $205, Barclays to $195, and Mizuho to $195 — all reiterating bullish ratings. Susquehanna added to the chorus on May 15, raising its target to $185. Every major covering firm moved in the same direction after the print. With the stock now at $129.47, the average sell-side target sits somewhere in the $185–$205 range — a gap of roughly 43–58%. That discount has been a consistent feature of recent BABA coverage, and as noted in the prior notes, it reflects real uncertainty about margin recovery rather than pure analyst optimism. The PE of around 16.7x and EV/EBITDA near 11.3x are not demanding multiples for a business of this scale, and the earnings surprise factor score sits at the 97th percentile — the company has a strong track record of beating estimates. But the EBITDA miss in May, driven by aggressive spending on quick commerce and cloud infrastructure, reminded the market that beating on revenue does not automatically translate to beating on profitability.
The institutional picture is stable. BlackRock holds 5.4% as the largest external shareholder, with a modest add of roughly 548,000 shares in the most recent filing period. Vanguard and JP Morgan Asset Management also added incrementally. Goldman Sachs trimmed by nearly 1.9 million shares as of end-March — a modest reduction for a position of that size, but the only notable cut among the top holders. Insider activity in April was entirely equity award grants, carrying no open-market signal.
Peer divergence is notable this week. JD fell 5.1% on the week, keeping company with BABA in the red. VIPS bucked the trend, gaining 5.7%, while PRX was essentially flat. The Chinese internet cohort is not selling off uniformly — BABA and JD are the underperformers, which reinforces the view that margin and investment cycle concerns specific to the larger platforms are driving the weakness rather than a broad macro rotation out of China.
The next confirmed earnings date is August 13. Between now and then, the question is whether the call-heavy options positioning proves prescient — or whether the stock continues to trade on the gap between an ambitious Street narrative and a business still working through an expensive investment cycle.
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