What happened
Shares of Alibaba Group Holding (BABA 1.89%) were running 7% higher at 10:32 a.m. ET Tuesday after J.P. Morgan upgraded the Chinese online retailer. The new rating on the shares comes just weeks after the investment bank had deemed Chinese technology stocks such as Alibaba, JD.com, and Tencent Holdings "uninvestable" for the next six to 12 months.
So what
The negative view had come amid a mounting crackdown by Beijing that also threatened them with delisting. J.P. Morgan analyst Alex Yao said he didn't foresee change coming for some time, perhaps only as early as the end of this year.
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However, the Chinese government reversed course recently, announcing it would be more supportive of its companies and would pursue measures that would bolster their "healthy development."
The basket of 22 stocks J.P. Morgan covers in the tech stock space have gained 34% in value since it made the "uninvestible" call on March 14.
Now what
J.P. Morgan has now raised its rating from underweight to overweight on the stock and nearly doubled its price target on its American depositary shares from $75 to $130.
Bloomberg reports Beijing is taking a more salutary position on companies in the tech sector at the same time it is enlisting their support in helping to turn around China's ailing economy.
Extreme lockdowns in major cities like Shanghai, where its 25 million residents have been forbidden from leaving their homes (not even allowing for deliveries) has led to food shortages and has further complicated supply chain problems.
