Alibaba enters the second week of June with a striking contradiction: the stock has shed 8.5% over the past week and 14.5% over the past month, yet options positioning has flipped to one of its most bullishly skewed readings in a year.
The options signal is the sharpest anomaly in the current setup. The put/call ratio dropped to 0.59 on Tuesday — more than three standard deviations below its 20-day average of 0.65, making it the most aggressively call-heavy reading in recent memory and sitting near the bottom of the 52-week range of 0.40–1.07. That kind of extreme call positioning against a backdrop of persistent price weakness is unusual. It suggests traders are buying upside exposure despite, not because of, near-term price action — a divergence worth watching closely heading into the August 13 earnings date.
The lending market tells a calmer story. Borrow availability has eased considerably over the past two weeks, climbing to 110.7% from a tighter reading near 87% in late May — meaning shares available to borrow now comfortably exceed the current short position. Cost to borrow is minimal at 0.47%, close to its lowest level of the past 30 days. Short interest itself drifted down roughly 2.3% on the week to about 38.5 million shares, continuing a mild retreat from the month's opening levels. There is no squeeze pressure here, and no sign that bears are pressing new positions aggressively. The overall lending setup is relaxed rather than stressed.
The Street remains constructive, but the gap between analyst targets and the current price is growing wider. Following the May 14 quarterly results, JP Morgan lifted its target to $205 and Barclays raised to $195, both maintaining Overweight ratings. Susquehanna moved its target to $185. All three had cut targets in March, so the post-earnings raises represent a meaningful reversal in tone. Yet at $119.70, BABA trades at a substantial discount to even the most cautious of those targets, implying 37–71% upside depending on the firm. The bull case rests on cloud growth, a 20% rise in daily active users driven by instant commerce integration, and revenues that beat consensus. The bear case centres on margin pressure: EBITDA came in at RMB 17 billion against a RMB 19 billion consensus, and quick commerce investments are compressing near-term free cash flow. The P/E has compressed to 15.3x, down 1.3 turns over the past month, and the price-to-book ratio of 1.6x reflects how far sentiment has moved since the stock's recent highs. On EPS surprise, BABA ranks in the 97th percentile of its universe — the company keeps beating estimates even as the stock slides.
The peer group confirms this is broadly a China tech story rather than a company-specific one. JD fell 4.7% on the week, VIPS dropped 6.4%, and PRX — Prosus, the Amsterdam-listed holding company with heavy BABA exposure — fell 6.5%. The week's selling has been sector-wide, which arguably makes the options skew more interesting: call buyers appear to be stepping in at the sector trough rather than rotating out.
BlackRock remains the largest Western holder at just over 126 million shares, having added roughly 1.2 million shares in Q1 2026. JPMorgan Chase trimmed its custodial position by 4 million shares through late May. The insider register shows only routine April award grants at zero cost — no open-market buying or selling of note.
The next major reference point is the August 13 earnings release. Between now and then, the key tension is whether the extreme call positioning in options reflects genuine conviction in a recovery, or simply cheap upside speculation at a depressed price level — and whether the stock can stabilise above $120 as the current quarter progresses.
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