Shares of Alibaba Group Holding Ltd. /zigman2/quotes/201948298/composite BABA -3.82% dropped 2.8% in premarket trading Thursday, after J.P. Morgan analyst Alex Yao said he turned "cautious" on the China-based e-commerce giant's fiscal second-quarter revenue outlook, citing "weak China consumption." Yao reiterated the overweight rating on the stock but cut the price target to $135 from $145.Yao expects "limited improvement" in core customer management revenue (CMR) from the first quarter given the resurgence of COVID in a wide range of cities in China, and expects deceleration in year-over-year cloud revenue growth. At the same time, Yao sees "potential upside" to earnings estimates given the company's commitment to cost savings and efficiency improvements. But Yao believes rather than earnings, revenue recovery is the key determinant of market sentiment. "As a result, Alibaba's weakening revenue outlook in the near term could continue to weigh on the share price despite an unchanged, or even potentially better, profit outlook," Yao wrote in a note to clients. The stock has tumbled 30.2% over the past three months through Wednesday, while the iShares China Large-Cap ETF /zigman2/quotes/208670743/composite FXI -1.71% has dropped 21.0% and the S&P 500 /zigman2/quotes/210599714/realtime SPX -0.03% has slumped 22.0%.