Alibaba

Alibaba Cloud named cloud computing and AI partner of NBA China as the basketball league returns after six years.

The National Basketball Association (NBA) and Chinese e-commerce company Alibaba have announced a multiyear partnership, as the league stages two games in Macau to mark its return to the Chinese market for the first time since 2019.

The announcement by Alibaba Group on Thursday said it would provide artificial intelligence and cloud computing services with the NBA and enhance fan experiences on the NBA app in China.

Alibaba Cloud will be the official cloud computing and AI partner of NBA China, it said.

The NBA is due to play two preseason games in the Chinese special administrative region on Friday and Sunday, part of a five-year contract with Las Vegas Sands’ Macau unit Sands China.

The games mark the first time the NBA is playing in Macau, the world’s largest gambling hub, and follow a years-long absence amid controversy over the 2019 Hong Kong protests.

The Macau games aim to bolster the NBA’s profile in China, where the league estimates say about 300 million people play basketball, at a time of rising political tensions between the United States and China.

The NBA’s absence followed a firestorm of controversy about comments made six years ago by the Houston Rockets’ then general manager Daryl Morey, who posted a message on social media in support of Hong Kong’s pro-democracy protests.

In the aftermath, Beijing suspended the broadcast of NBA games, prompting corporate sponsors to flee and the league to suffer what it described at the time as dramatic financial consequences. Preseason NBA games in China were also scrapped.

The NBA games are being held at the Sands Venetian property, and Shaquille O’Neal is among NBA celebrities attending the event, the league said.

Sands owner, the US billionaire Adelson family, also owns the Texas-based NBA team, the Dallas Mavericks.

The Brooklyn Nets, owned by Alibaba chairman Joseph Tsai, will play the Phoenix Suns at sold-out games in the arena.

This NBA season comes with high hopes for a Chinese rookie: Yang Hansen, a 7-foot-1 (216cm) draft pick who is expected to play a role for the Portland Trail Blazers this season.

He’s thrilled that the NBA is headed back there, finally.

“I want to say firstly, playing for the Blazers is a wonderful thing for me, and I wish that I can take all the players and management and coaches to China for sure in the future,” Yang said with the support of an interpreter.

“For sure, I wish [for] more games in China. … That works for me perfectly.”

Shares of Alibaba (BABA 4.26%) are rallying again today, up as much as 5.5% before settling into a 4.4% gain as of 12:34 p.m. ET.

Alibaba held a big cloud event last week, giving a bullish outlook and raising its cloud spending forecast above its prior target of $53 billion over three years. Apparently, the outlook was encouraging enough for several Wall Street analysts to significantly raise their price targets on shares to start the week.

Morgan Stanley and Jefferies up their BABA targets

On Monday, analysts at Wall Street banks Morgan Stanley and Jefferies raised their price targets on Alibaba. Morgan Stanley’s Alibaba analyst team raised its target from $165 to $200, largely on the back of increased cloud computing growth. The analysts now actually see cloud growth accelerating 32% in fiscal 2026 and 40% in 2027. For reference, last quarter Alibaba grew its cloud revenue 26%, which was already an accelerating figure.

Obviously, generative AI is sparking huge new demand for Alibaba’s cloud services and models, with the Morgan Stanley analysts projecting the number of tokens doubling every two to three months. An AI token is a word or part of a word in an AI prompt or response that acts as essentially a “unit” of AI processing.

Meanwhile, investment bank Jefferies raised its price target from $178 to $230. The analysts cited “remarkable” progress on Alibaba building out AI infrastructure, innovating with its Qwen series of models, and developing useful software agents.

Image source: Getty Images.

Alibaba is still cheaper than the “Magnificent Seven”

Alibaba’s stock has rallied 113% this year in a remarkable AI-fueled turnaround. However, shares only trade at 20.7 times earnings, which is still cheaper than the large U.S.-based tech giants.

There are certainly risks to investing in China; however, it appears the government is now more supportive of the tech sector than the hostile posture it took back in 2021-2022. As such, it’s no surprise to see the country’s tech leaders doing much better today.

Published on
24/09/2025 – 9:33 GMT+2

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Shares in Alibaba rose around 9% in Hong Kong on Wednesday afternoon after CEO Eddie Wu said that he would lift the firm’s AI budget.

The e-commerce giant had already pledged to invest 380 billion yuan (€45bn) in AI-related infrastructure over the next three years, seeking to stay ahead as firms race to develop new models. Wu did not give details on the additional expenditure.

The pledge came as Wu was launching Alibaba’s most powerful AI model during a company conference in Hangzhou, China. The firm’s chief technology officer, Zhou Jingren, said that the Qwen3-Max model contains more than 1 trillion parameters. These are learnt values that determine how the system processes information and makes predictions.

In certain metrics, Alibaba claimed that its Qwen3-Max model outperformed rival offerings like Anthropic’s Claude and DeepSeek-V3.1, citing third-party benchmarks.

“The industry’s development speed far exceeded what we expected, and the industry’s demand for AI infrastructure also far exceeded our anticipation,” Wu said on Wednesday. “We are actively proceeding with the 380 billion investment in AI infrastructure, and plan to add more.”

Stressing that Alibaba must push ahead, Wu estimated that total global investment in AI will exceed $4 trillion (€3.4tn) in the next five years. Chinese rivals such as Tencent and JD.com, as well as US tech firms, have invested heavily in AI over the past year.

Complicating Alibaba’s progress, however, are access restrictions on AI processors from Nvidia.

Last week, China’s internet regulator banned the country’s biggest tech firms from buying Nvidia’s artificial intelligence chips, according to the Financial Times.

The reported ban comes as China seeks to boost its homegrown chip industry and wean itself off dependence on the US.

In August, Chinese firms had previously been advised not to buy Nvidia’s H20, a chip designed specifically for China, with officials in Beijing warning of perceived security risks to national data and systems.

The warning arrived after the US lifted its own ban on the export of H20 chips to China, imposed in April amid a trade spat.

Chinese e-commerce giant Alibaba Group (BABA 2.24%) was standing tall on the stock market Wednesday. Fueled by a successful round of capital-raising, the company’s U.S.-traded American depositary shares (ADSes) were rising by nearly 3% in late-session action. That was easily outpacing the S&P 500 index’s gain of 0.2% at that point.

Billions of dollars in fresh capital

Alibaba announced that it has completed a roughly $3.2 billion flotation of zero coupon convertible senior notes. The purchasers were “certain non-U.S. persons,” it did not identify.

Image source: Getty Images.

These securities can be converted into ADSes at an initial rate of nearly 5.18 per every $1,000 in principal amount of the notes. The notes mature in 2032 if not converted. Alibaba stressed that the conversion rate is subject to adjustment, under certain conditions.

At the initial rate, Alibaba wrote, the conversion price would be $193.15 per ADS. That’s a more than 31% premium to the price of the company’s Hong Kong-listed ordinary shares.

The company said it will use the amount it nets from the sales of the notes for “general corporate purposes.” The two specific uses it mentioned were a bolstering of its cloud infrastructure and international operations.

Dilution? What dilution?

Investors liked the idea of Alibaba raising capital in this way because the note issue won’t end up being too dilutive to existing shareholders, or present a huge additional burden to the balance sheet. The market cap of the ADSes currently tips the sales at almost $397 billion, while at the end of its latest-reported quarter its debt pile stood at 227 billion Hong Kong dollars ($32 billion).

Alibaba Group (BABA 4.08%) has tested investors’ patience over the past few years. From regulatory crackdowns to slowing consumer spending and intensifying competition from Pinduoduo and Meituan, the company went from China’s undisputed tech champion to a stock many investors gave up on.

But the latest results suggest there are reasons to turn more optimistic. While risks remain, Alibaba is showing early signs of strategic progress in areas that matter for the long run. Here are three reasons investors should take another look.

Image source: Getty Images.

1. Cloud and AI are driving real growth

For years, Alibaba Cloud was a disappointment to investors. Despite being China’s market leader, growth slowed and profits remained elusive. That narrative is beginning to change.

In its June 2025 quarter (fiscal Q1 2026), Alibaba reported cloud revenue up 26% year over year to RMB 33.4 billion ($4.7 billion), significantly outpacing the company’s overall revenue growth of 10%. Even more telling, management disclosed that artificial intelligence (AI)-related revenue grew at triple-digit rates for the eighth consecutive quarter, and now accounts for more than 20% of Alibaba Cloud’s external revenue.

That’s not just a rebound — it’s a structural shift. AI workloads are far more compute-intensive than traditional hosting, which means higher revenue per customer, better margins, and stickier client relationships. With its large language model, Tongyi Qianwen, along with AI-powered enterprise tools, Alibaba is no longer just a cloud infrastructure provider. It’s becoming an AI platform, which could prove to be a durable growth engine.

2. Building strategic resilience with domestic AI chips

Another reason for optimism is Alibaba’s investment in semiconductor design. Reports indicate the company is testing its own AI inference chip, a critical step in reducing dependence on U.S. technology amid export restrictions.

To be clear, Alibaba isn’t about to replace Nvidia for training large-scale models. But inference — running AI models in real-world applications — is where much of the usage (and monetization) occurs. By developing its own inference chips, Alibaba is hedging against supply chain risks and ensuring it can scale AI services without being entirely at the mercy of geopolitical tensions.

This strategy matters because it protects Alibaba’s ability to commercialize AI across its businesses — from cloud computing to e-commerce and logistics. And while there is no plan to offer these chips to external customers, there is no reason to think that this cannot change in the future, opening up a new potential revenue source.

In other words, Alibaba’s investment in domestic chips is both a defensive and potentially offensive move that investors should not overlook.

3. Encouraging signs of a sentiment shift

Finally, sentiment may be slowly turning in Alibaba’s favor. Following the latest results, Mizuho, Bernstein, and Citi all raised their price targets or reiterated buy/outperform ratings, pointing to cloud growth and AI adoption as key catalysts.

Analysts’ upgrades don’t guarantee a smooth recovery. In fact, Alibaba has plenty more to do to regain long-term investors’ confidence, such as returning to sustainable growth in its e-commerce business, reducing the losses of its other companies, and growing its other ventures, such as Ding Talk and entertainment.

But when Wall Street begins to rerate a stock after years of negativity, it often signals a shift in how investors view the company’s future potential. If Alibaba can execute in the coming quarters, there’s a good chance that the stock price may start to reflect these positive developments.

For perspective, Alibaba’s stock trades at a price-to-sales ratio of just 2.4 times, which is just a fraction of its peak valuation of 15.5 times. So, owning the stock now offers downside protection, as well as upside opportunity.

What it means for investors

Alibaba is far from risk-free. Competition in e-commerce remains fierce, and China’s macroeconomic backdrop is still uncertain.

But beneath the noise, Alibaba is showing encouraging signs: Its cloud business is gaining momentum thanks to AI, it’s building strategic resilience with domestic chip development, and sentiment is finally beginning to thaw.

For long-term investors, that combination may be the clearest reason in years to be cautiously optimistic about holding Alibaba stock.

It’s been a tough few years for Alibaba Group (BABA 0.54%) investors. Shares have heavily underperformed the market since 2020. Yet sales have continued to rise. Looking back at the company’s financial history reveals a peculiar picture. It’s not hard to see why some investors think this former growth darling is now a value stock.

Not everything peaked in 2020 for Alibaba

During the COVID-19 pandemic’s height, e-commerce sales spiked, directly benefiting the sales and net income for major retailers like Alibaba. That year, for example, the company generated a staggering $74 billion in sales during its Singles Day event — nearly double the $38 billion brought in the year before.

In the years that followed, however, the company faced antitrust investigations, leading to a $2.8 billion fine. Meanwhile, outspoken founder Jack Ma garnered increased scrutiny from regulators and Chinese party officials.

BABA data by YCharts.

While growth since 2020 has undoubtedly been tepid, Alibaba’s sales have continued to grow. Its net income is only 26% below its 2020 highs. The stock price, meanwhile, is more than 60% below its pandemic highs. That has brought the company’s price-to-earnings ratio down to just 15.6 — roughly half what the S&P 500 trades at overall.

Image source: Getty Images.

What’s the future for Alibaba? Sales are expected to grow by 6% this year, with another 8% growth expected the following year. Earnings per share, meanwhile, are expected to hit $62.47 this year, growing to $75.19 next year. Clearly, analysts remain fairly optimistic about the company’s financial situation.

After Alibaba’s stock price peaked in 2020, the company’s growth prospects reset sharply. But with shares trading at just 15.6 times earnings despite expectations for rising sales and earnings, shares seem appealing for contrarian investors looking to add beaten-down stocks to their portfolio.

Shares of Chinese e-commerce and tech giant Alibaba (BABA 12.82%) rallied on Friday, appreciating 13.1% as of 2:28 p.m. ET.

Alibaba reported earnings today, which appeared to encourage investors. While profits actually went down, an acceleration of cloud and artificial intelligence (AI) revenue appear to be the most important data points.

In addition, the Wall Street Journal reported the Chinese tech giant has developed a new AI chip, which could take on importance since China recently issued an order discouraging the use of Nvidia‘s (NVDA -3.38%) H20.

Alibaba is becoming a top Chinese AI company

In its fiscal first quarter, Alibaba grew revenue just 2%, but revenue grew 10% outside of divestitures, which included the Sun Art and Intime businesses. Within that 10%, Alibaba’s domestic e-commerce revenue grew 10%, international e-commerce grew 19%, and the cloud intelligence group accelerated to a 26% growth rate.

On the negative side, profits actually decreased, with adjusted non-GAAP (generally accepted accounting principles) earnings before interest, taxes, depreciation, and amortization (EBITDA) falling 11%. The company put big investments behind its Taobao Instant Commerce initiative, which aims to deliver packages within an hour, as well as associated marketing efforts. An overwhelming majority of Alibaba’s business is still in a brutally competitive Chinese e-commerce industry, and at least in this quarter, we saw that competition in the form of lower margins.

Yet it appears the cloud revenue acceleration was exciting enough, especially as management noted that AI-related cloud revenue grew at a triple-digit rate for the eighth consecutive quarter.

AI enthusiasm may have also been sparked by today’s Wall Street Journal article highlighting Alibaba’s new chipmaking efforts. Alibaba’s prior efforts in this area had focused on application-specific chips, but the WSJ reported Alibaba’s newest chip can achieve a broader range of AI inference tasks. Also embedded in the WSJ article is the fact that. unlike Huawei’s AI chip, Alibaba’s new chip will be software-compatible with Nvidia’s, so developers won’t have to reprogram their entire stack.

Image source: Getty Images.

Alibaba on the rebound?

Alibaba has rebounded strongly off its lows of late 2022, more than doubling since then, but also sits about 63% below its all-time highs from late 2020. The stock trades for just 18 times earnings, which still seems cheap for a tech giant with an AI growth story.

Of course, most Chinese tech giants trade cheaper than their U.S. peers for geopolitical reasons, and Alibaba also has strong competition on the e-commerce side. Nevertheless, for those seeking some China-specific exposure, Alibaba should be on the list, if not near the top.