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NetEase, Inc. (NASDAQ:NTES) is one of the top cheap stocks with Strong Buy ratings on Wall Street. Morgan Stanley lifted the price target on NetEase, Inc. (NASDAQ:NTES) to $158 from $154 on May 26 and maintained an Overweight rating on the shares. The firm stated that its revenue estimates are staying “largely unchanged”, but it is increasing its net profit estimates over 2026-28, incorporating the stronger gross profit margin in Q1 and better operating expense management.

The rating update came after NetEase, Inc. (NASDAQ:NTES) announced unaudited results for fiscal Q1 2026, reporting that net revenues were RMB30.6 billion (US$4.4 billion), reflecting a growth of 6.1% compared with the same quarter of 2025. Games and related value-added services net revenues came up to RMB25.7 billion (US$3.7 billion), up 6.9% compared to the prior year period. Management further reported that gross profit for the quarter was RMB21.2 billion (US$3.1 billion), up 14.8% compared to the prior year period, while total operating expenses were RMB8.6 billion (US$1.2 billion), up 6.5% compared with the same quarter of 2025.

NetEase, Inc. (NASDAQ:NTES) is an internet technology company that provides premium online services related to community, content, communication, and commerce. The company\s operations are divided into the following business segments: Online Game Services, Youdao, Cloud Music, and Innovative Businesses and Others.

While we acknowledge the potential of NTES as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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