What's Going On With Alibaba Stock Tuesday

Alibaba Group Holding Limited BABA stock declined on Tuesday following reports of the downsizing of its cloud division's workforce by 7% as it prepared for a spinoff and eventual IPO.
China's largest cloud service has begun offering severance to employees or transfers to other parts of the Alibaba empire, Bloomberg cites knowledgeable sources.
Alibaba aims to entirely carve out its cloud unit into a separate company within a year.
Alibaba Cloud is one of the biggest companies likely for creation via a six-way split of the parent, joining other units like the Cainiao logistics division and international commerce to pursue independent fundraising and potential listings.
Some analysts valued the cloud business at over $30 billion, a prime beneficiary of a post-ChatGPT upswell that depends on cloud resources to train next-generation AI models.
Alibaba picked the cloud unit as an early IPO candidate due to its more developed business model and customer profile.
The IPO also fueled speculations of the firm succumbing to market or political realities.
Susquehanna analyst Shyam Patil maintains Alibaba with a Positive, lowering the price target from $175 to $160.
Price Action: BABA shares traded lower by 1.57% at $84.75 premarket on the last check Tuesday.
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