Alibaba is in the spotlight with stocks traded in the US, which has soared nearly 70% so far in 2025 as a favorite play in China’s artificial intelligence. The company said Thursday that AI-related product revenues rose three-digit digits in the sixth quarter during the period ended in December. The Qwen AI model has proven to be a capable rival to Deepseek, along with winning deals on iPhones sold in China. Once politically on the sidelines, founder Jack Ma made his latest official reappearance on February 17th. He lined up in front of Chinese President Xi Jinping’s National President at a rare conference held with entrepreneurs, including Deepshek’s Lian Wenfeng. Several analysts believe Alibaba’s profits will continue, and Jefferies has set a price target of $156 as of February 20th. That’s more than 8% increase from the closing price of $143.75 on Friday. UBS equity strategist said Thursday that he switched Alibaba’s PDD in his model portfolio “considering exposure to AI and quantum factors.” Remember just a few months ago, Temu’s parents increased their market capitalization and raised concerns that Alibaba was struggling to compete in its core e-commerce business? Taobao and Tmall Group saw a 5% increase in sales in the recent quarter. As many investors are excited about the Chinese AI opportunities, the crowds in related stocks have so far won at 0.02 in UBS’s scoring system this year. This is well below the 0.2 increase in US AI-related name crowding scores over the past two years, UBS said. Alibaba had the highest congestion score among China’s large internet technology names, the report says. “Analyses of our Quants team previously suggested that reasonable but crowded stocks saw outperformance in the closest range,” Hong Kong’s Hangsen Index said on Friday. The stocks traded locally in China Unicom, Lenovo and Alibaba have earned major profits. “Should investors spin from Alibaba to AI trade lagers (i.e. Tencent and Baidu)? Not so for now.” “Both Tencent and Baidu stock prices are in a variety of ways, with various risks I think it could be driven by AI development. “Baidu’s US list stocks said on February 18 that AI cloud revenues rose 26% year-on-year to 7.1 billion yuan in the fourth quarter. Despite sharing, it has increased by around 8% per year to date. Tencent’s stock, which trades in Hong Kong, has yet to report earnings for that period, but has so far rises around 24% per year. JPMorgan is neutral on Baidu, but overweight on Tencent and Alibaba. The company has a price target of $125 against Alibaba shares, suggesting it has fallen 13% since the end of Friday. At least four other major investment companies have purchase ratings on Alibaba. However, Morgan Stanley is more cautious, especially with an equal weight rating and a price target of $100. That means a 30% drop from the end of Friday. The company noted that Alibaba’s capital expenditure was 11% of revenue for the most recent quarter, compared to 3% in the previous quarter, a potential weight of future margins that management warned. Morgan Stanley also highlighted risks such as weak consumption and slower pace of enterprise digitalization. – CNBC’s Michael Bloom contributed to this report.
