Alibaba Group Holding Limited, through its subsidiaries, provides technology infrastructure and marketing reach to help merchants, brands, retailers, and other businesses to engage with their users and customers in the People's Republic of China and internationally. The company operates through seven segments: China Commerce, International Commerce, Local Consumer Services, Cainiao, Cloud, Digital Media and Entertainment, and Innovation Initiatives and Others. It operates Taobao and Tmall, which are digital retail platforms; Alimama, a proprietary monetization platform; 1688.com and Alibaba.com, which are online wholesale marketplaces; AliExpress, a retail marketplace; Lazada, Trendyol, and Daraz that are e-commerce platforms; Freshippo, a retail platform for groceries and fresh goods; and Tmall Global, an import e-commerce platform. The company also operates Cainiao Network logistic services platform; Ele.me, an on-demand delivery and local services platform; Koubei, a restaurant and local services guide platform; and Fliggy, an online travel platform. In addition, it offers pay-for-performance, in-feed, and display marketing services; and Taobao Ad Network and Exchange, a real-time online bidding marketing exchange. Further, the company provides elastic computing, storage, network, security, database, big data, and IoT services; and hardware, software license, software installation, and application development and maintenance services. Additionally, it operates Youku, an online video platform; Quark, a platform for information search, storage, and consumption; Alibaba Pictures and other content platforms that provide online videos, films, live events, news feeds, literature, music, and others; Amap, a mobile digital map, navigation, and real-time traffic information app; DingTalk, a business efficiency mobile app; and Tmall Genie smart speaker. The company was incorporated in 1999 and is based in Hangzhou, the People's Republic of China.

Alibaba has a strong balance sheet, but it is accompanied by noticeable pressure on operating efficiency and earnings quality. The P/E multiple looks only moderately above the industry, but P/S and P/FCF are meaningfully more expensive than the median, which limits re-rating potential at the current growth rate. P/B is slightly below the industry, so on a book-value basis the stock does not look extremely expensive; however, this advantage is offset by weak return on capital. ROE, ROA, and ROI are below industry benchmarks, and ROE as well as operating margin have deteriorated in recent periods, indicating lower capital efficiency and pressure on the operating model. At the same time, net profit margin remains above the median, but its support appears less sustainable against the backdrop of declining operating margin and weak net income dynamics. The debt burden looks comfortable: debt/equity is significantly below the industry, and long-term debt has declined over time, reducing financial risks. Liquidity, as measured by the current ratio, is acceptable, but a quick ratio of zero is concerning and points to dependence on working capital and the composition of current assets. Revenue, profit, and EBITDA by year generally show weakening compared with stronger earlier periods, so the market is unlikely to raise the valuation aggressively without a clear trend reversal. A dividend yield of around 1% is not enough to provide substantial support to the share price. Overall, the fundamentals are neutral to mildly negative for the target price: the balance sheet and low debt support the valuation, but weak profitability, expensive revenue and FCF multiples, and deteriorating operating momentum limit upside.

ALIBABA-12.26

Alibaba Group Holding Limited

Сильный индекс, значительно упал. Быки в растерянности.

Strong index, significantly down. The bulls are confused.

Сильный индекс, значительно упал. Медведи в растерянности.

Strong index, significantly down. The bears are confused.

Средний индекс, значительно вырос. Рынок не поддерживает быков.

Medium index, significantly up. The market does not support the bulls.

Слабый индекс, значительно упал. Рынок на стороне медведей.

Weak index, significantly down. The market is on the bears' side.

Средний индекс, незначительно вырос. Отток средств из лонгов снизился, но остается значительным.

Medium index, slightly up. The outflow of funds from longs has decreased, but remains significant.

Средний индекс, незначительно упал. Приток средств в шорты снизился, но остается положительным.

Medium index, slightly down. The inflow of funds into shorts has decreased, but remains positive.

Alibaba’s strong balance sheet and low debt are offset by weak profitability, expensive P/S and P/FCF multiples, and deteriorating operating momentum.

Alibaba BABA is ramping up AI spending at a rapid pace, creating both a significant growth opportunity and near-term financial pressure. The company spent RMB67.7 billion on capital expenditures in the June 2026 quarter, up 75% year over year, primarily reflecting investments in AI infrastructure, higher CPU-compute capacity and rising chip-component prices. Alibaba has also committed to a RMB380 billion three-year capital investment plan, with RMB190 billion already spent by the end of the June quarter.
The spending is already weighing on cash generation. Free cash flow deepened to an outflow of RMB44.7 billion, compared with an RMB18.8 billion outflow a year earlier, with Alibaba attributing the decline primarily to higher cloud-infrastructure expenditure. Meanwhile, adjusted EBITA fell 30% and net income declined 75%, highlighting the near-term earnings cost of the investment cycle.
However, early AI monetization provides an important offset. AI Cloud and Compute Services revenues rose 45% to RMB48.4 billion, while adjusted EBITA jumped 133% to RMB5.6 billion. Alibaba also expects AI-related CapEx to break even in roughly three years, with proprietary chips and higher-margin AI services providing potential avenues to improve returns.
Overall, Alibaba’s AI investment is showing early revenue and profitability traction, but the payoff is not yet fully proven. The investment remains a longer-term proposition as substantial upfront spending continues to weigh on cash flow and earnings.
How Are Alibaba’s AI Competitors Positioned?
Microsoft MSFT is scaling AI infrastructure aggressively, adding 31 data centers this quarter and another gigawatt of capacity, while fourth-quarter fiscal 2026 CapEx reached $41 billion, roughly two-thirds for CPUs and GPUs. Microsoft also expects calendar-2026 CapEx of about $175 billion and says Azure demand exceeds capacity. This positions the company as a major AI infrastructure spender alongside Alibaba, with Microsoft focused on monetizing cloud and AI demand.
Alphabet GOOGL is similarly accelerating AI infrastructure, with second-quarter 2026 CapEx of $44.9 billion, most directed to technical infrastructure — 60% went to servers and 40% to data centers and networking. Alphabet raised 2026 CapEx guidance to $195 billion-$205 billion as demand outpaces supply. Against Alibaba’s AI-spending push, Alphabet competes through Google Cloud, AI infrastructure, TPUs and Gemini, with the company expecting investment to keep rising.
BABA’s Share Price Performance, Valuation & Estimates
BABA stock has declined 26.5% year to date compared with a 3.8% drop in the Zacks Retail-Wholesale sector.
BABA’s YTD Price Performance
From a valuation standpoint, BABA stock is currently trading at a trailing 12-month Price/Sales ratio of 2.29X compared with the industry’s 2.18X. BABA has a Value Score of C.
BABA’s Valuation
The Zacks Consensus Estimate for BABA’s fiscal 2027 EPS is pegged at $6.41, down from estimates issued 30 and 60 days ago, but still indicating 64.78% growth from the prior year.
Image Source: Zacks Investment Research
Alibaba currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Alibaba's AI Spending Ramps Up: Is the Investment Paying Off?

Key Points
Amazon maintains a dominant lead in global cloud infrastructure and North American e-commerce growth.
Alibaba Group offers a value-oriented play on the Chinese digital economy with a highly liquid balance sheet.
Which e-commerce titan is the better addition to your long-term portfolio for 2026?
Amazon and Alibaba are titans of e-commerce and cloud computing, but they operate in very different regulatory and economic environments. Between Amazon (NASDAQ:AMZN) and Alibaba Group (NYSE:BABA), which is the better buy?
Amazon dominates North American retail and global cloud infrastructure through its AWS segment. Alibaba serves as a central pillar of Chinese digital commerce while expanding its own cloud and international reach. Comparing these two giants involves evaluating their different growth rates, debt levels, and the unique risks inherent to their primary markets.
The case for Amazon
Amazon is a leader among global retail stocks, driven by its expansive online marketplace and physical stores. The company generates revenue from a wide range of customers, including individual consumers, third-party sellers, and government agencies. Its Amazon Web Services segment provides critical cloud infrastructure to businesses worldwide, while its advertising and digital entertainment units continue to diversify the core business model.
In the fiscal year ended Dec. 31, 2025, revenue reached nearly $716.9 billion, representing growth of approximately 12.4% over the prior year. The company reported net income of roughly $77.7 billion for this period. This resulted in a net margin of close to 10.8%, which tracks the percentage of total sales that remains as profit after all costs.
As of its December 2025 balance sheet, the debt-to-equity ratio was approximately 0.4x. This ratio measures total debt relative to shareholder equity, suggesting a moderate level of leverage. The current ratio, which indicates a company's ability to cover short-term liabilities with short-term assets, was nearly 1.1x. Free cash flow for the fiscal year ended Dec. 31, 2025, was roughly $7.7 billion, representing the cash remaining after accounting for capital expenditures.
The case for Alibaba
Alibaba Group prioritizes an integrated approach to commerce and technology by focusing on cloud computing and artificial intelligence. The company operates dominant domestic platforms in China while expanding internationally through brands such as AliExpress and Lazada. While Alibaba Group does not disclose major customers in its filings, it maintains a massive ecosystem of hundreds of millions of active users and merchants.
In the fiscal year ended March 31, 2026, revenue reached approximately $152.7 billion, representing nearly 2.7% growth over the previous year. Net income for the period was roughly $15.5 billion, reflecting the company's ability to remain profitable despite modest top-line expansion. The net margin, a metric showing how much profit is generated for every dollar of sales, was close to 10.1%.
According to its March 2026 balance sheet, the company's debt-to-equity ratio was nearly 0.2x. The current ratio was approximately 1.3x, indicating the company's liquidity position. For the fiscal year ended March 31, 2026, the company reported negative free cash flow of roughly $7.6 billion. This means the cash spent on capital investments exceeded the cash generated from operating activities during that time frame.
Risk profile comparison
Amazon faces significant competition in the retail and cloud sectors from well-resourced global companies. It is currently navigating a lawsuit from the Federal Trade Commission and various states over allegations of antitrust violations and deceptive advertising. Other risks include the complexity of its global supply chain and potential regulatory changes regarding data privacy and artificial intelligence.
Alibaba Group navigates a complex regulatory environment in China that has historically impacted the business operations of large technology companies. It faces stiff competition in the domestic e-commerce market from rivals such as PDD Holdings and JD.com. Additionally, geopolitical tensions and international trade policies can affect its cross-border commerce and global cloud expansion efforts.
Valuation comparison
Alibaba Group is priced at a lower P/S ratio and Forward P/E than Amazon, which compares price to sales over the past twelve months and future earnings estimates.
Forward P/E
19.5x
17.1x
P/S ratio
3.5x
1.7x
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy in 2026?
Between the two stocks, Amazon appears to be the more suitable choice for long-term investors.
Admittedly, Alibaba's market leadership in China and low valuation make it a tempting prospect. Unfortunately, it also comes with a great deal of political risk. One never knows when or how the Chinese government might impose regulations or restrictions that create uncertainty for its business.
This stands in contrast to Amazon, which has not only pioneered e-commerce and cloud computing but also built one of the most stable and profitable businesses trading on public markets today.
Admittedly, the $220 billion in capital expenditures (capex) for 2026 and the corresponding negative free cash flows may have worried some investors. Nonetheless, Amazon likely has the resources to compete in this business, and its massive investments have driven increased growth, particularly in its AWS segment.
Finally, even with Amazon’s much higher P/S ratio, investors should take note of the 19.5 forward P/E ratio. This is unusually low for a stock that routinely traded above 50 times earnings in past years.
Consequently, the stock has become so discounted that it sells at only a modest earnings multiple premium to Alibaba, a factor that arguably cements Amazon as the consumer discretionary stock of choice among the two.
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Amazon vs. Alibaba: Which Consumer Stock Is a Better Buy in 2026?

For Immediate Release
Chicago, IL – September 28, 2026 – Today, Zacks Investment Ideas feature highlights Alibaba BABA, Baidu BIDU, Kingsoft Cloud KC, Tencent TCEHY, Hesai HSAI, Pony AI PONY and WeRide WRD.
Trump-Xi Meeting Puts These 5 Chinese AI Stocks in Focus
China’s artificial intelligence stocks are back in focus after President Trump hosted Chinese President Xi Jinping at the White House on Thursday, with AI emerging as one of the central topics of their meeting.
Along with trade, technology, and other geopolitical issues, Trump and Xi discussed artificial intelligence, with Xi calling for continued dialogue, cooperation, and maintaining human control over the technology.
The two countries also agreed to extend their existing trade truce by two months, although no major breakthrough on AI or technology restrictions was announced.
Meanwhile, private AI developer DeepSeek has helped demonstrate China's rapid progress in generative AI despite limits on access to advanced U.S. chips. Furthermore, many Chinese AI stocks trade at sizable valuation discounts to their U.S. counterparts, partly reflecting geopolitical and regulatory risks.
That said, here are five publicly traded Chinese AI companies worth watching as the country's AI buildout accelerates.
1. Alibaba – BABA
Alibaba arguably offers the broadest publicly traded exposure to China's AI infrastructure expansion through Alibaba Cloud, its Qwen models, and its growing portfolio of proprietary AI chips.
Alibaba recently raised roughly $10 billion, with 60% of the proceeds earmarked for global computing infrastructure and the remaining 40% targeting hyperscale AI data centers, storage, databases, and high-performance networking. The company also plans to expand Alibaba Cloud's operated global data-center capacity to more than 20 gigawatts by 2032.
AI Cloud and Compute Services revenue surged 45% year over year to more than $7 billion in Alibaba's latest quarter.
2. Baidu – BIDU
Baidu has rapidly shifted from its traditional search business to an AI-first strategy spanning cloud infrastructure, large language models (LLMs), and autonomous driving.
Most notably, Baidu's AI Cloud Infrastructure revenue jumped 50% YoY to $1.1 billion in Q2, while GPU Cloud revenue soared 283%, reflecting strong demand for computing capacity used in AI training and inference.
That makes Baidu one of the most direct large-cap Chinese plays on growing enterprise demand for AI computing.
3. Kingsoft Cloud – KC
Although much smaller than Alibaba and Baidu, Kingsoft Cloud provides perhaps the purest exposure to China's cloud infrastructure expansion among U.S.-listed Chinese stocks.
Kingsoft's AI cloud gross billings surged 82% YoY in Q2 and accounted for 56% of its public cloud revenue, driven by AI infrastructure services and Model-as-a-Service (MaaS) offerings.
For investors specifically tracking China's need for more computing capacity rather than consumer internet businesses, KC is an intriguing name to watch.
4. Tencent – TCEHY
Tencent is another Chinese technology giant investing aggressively across AI models, agents, and cloud infrastructure.
Tencent's Q2 capital expenditures soared 176% YoY to nearly $8 billion, as the company made substantial AI-related compute prepayments to support its Hy models, AI agents, and growing external cloud demand.
Tencent's massive gaming, social-media, and payments businesses make AI infrastructure a less concentrated part of the overall investment story than at Kingsoft Cloud, although its scale gives it significant resources to fund the buildout.
5. Hesai – HSAI
Hesai provides a different kind of infrastructure exposure through physical AI.
Rather than operating data centers, Hesai develops lidar, spatial-intelligence technology, and robotic actuation systems that allow autonomous vehicles and robots to perceive and interact with their surroundings.
Hesai now describes itself as a physical-AI infrastructure company spanning the full robotics chain of "see, understand and act," giving investors exposure to the expansion of autonomous mobility and embodied AI.
Honorable Mention: Pony AI & WeRide
Pony AI and WeRide are worth monitoring as more direct bets on autonomous driving and robotaxis rather than the underlying cloud buildout.
Pony AI's robotaxi revenue surged 691% year over year in Q2, while its fleet reached nearly 2,000 vehicles.
WeRide's Q2 revenue jumped 82%, while its global Level 4 autonomous fleet had expanded to approximately 3,400 vehicles by the end of July.
Both companies should be significant consumers of AI compute as autonomous-driving systems become increasingly sophisticated.
Bottom Line
The Trump-Xi meeting reinforced just how central artificial intelligence has become to the economic and technological relationship between the United States and China.
Among publicly traded Chinese companies, Alibaba and Baidu provide the broadest combination of AI models, cloud infrastructure, and computing capacity, while Kingsoft Cloud offers more concentrated cloud exposure.
Tencent brings tremendous financial scale, while Hesai, PonyAI, and WeRide extend the opportunity into physical AI, robotics, and autonomous transportation.
As China's AI ecosystem continues to expand despite constraints on access to some advanced U.S. technology, these stocks provide investors with several different ways to monitor the country's accelerating AI buildout.
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Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
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WeRide Inc. (WRD) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Ideas feature highlights: Alibaba, Baidu, Kingsoft Cloud, Tencent, Hesai, Pony AI and WeRide

Key Points
Alibaba consistently generates a significantly higher absolute volume of total revenue across all measured periods, while Uber repeatedly demonstrates a noticeably faster overall rate of expansion.
Uber displays a continuous upward trajectory punctuated by occasional quarter-over-quarter dips, while Alibaba consistently maintains a notably seasonal business pattern featuring distinct and recurring quarter-over-quarter fluctuations.
Investors evaluating the financial metrics of the two companies should watch whether the revenue growth gap between them continues to narrow or begins to widen again over the next several reporting cycles.
Alibaba Group: Revenue Scale and Seasonal Fluctuations
Alibaba Group Holding (NYSE:BABA) primarily earns revenue by operating extensive online e-commerce retail distribution networks, providing comprehensive cloud computing technology capabilities, facilitating complex international logistics solutions, and managing digital media entertainment services for global enterprises and consumers.
It recently completed a $10.2 billion ordinary share placement intended to fund advanced computing infrastructure, while concurrently navigating newly filed securities fraud class action lawsuits concerning specific government regulatory designations during the period.
Uber Technologies: Sequential Revenue Expansion and Slower Growth
Uber Technologies (NYSE:UBER) primarily generates revenue by operating an expansive global digital application ecosystem that directly connects smartphone consumers worldwide with a diverse variety of independent transportation, ride-hailing, and local retail delivery service providers.
It formally published a comprehensive statutory offer document to acquire all outstanding shares in Delivery Hero, and it simultaneously launched a new autonomous ride-hailing service across multiple European testing markets alongside regional partners.
Why Revenue Matters for Investors
Revenue measures total gross sales to indicate overall enterprise scale before deducting typical operating expenses. This metric serves as a fundamental baseline indication of overall consumer demand and business growth.
Quarterly Revenue: Alibaba Group vs. Uber Technologies
Q3 2024
$33.0 billion (quarter ended Sept. 30, 2024)
$11.2 billion (quarter ended Sept. 30, 2024)
Q4 2024
$38.9 billion (quarter ended Dec. 31, 2024)
$12.0 billion (quarter ended Dec. 31, 2024)
Q1 2025
$32.5 billion (quarter ended March 31, 2025)
$11.5 billion (quarter ended March 31, 2025)
Q2 2025
$34.2 billion (quarter ended June 30, 2025)
$12.7 billion (quarter ended June 30, 2025)
Q3 2025
$34.6 billion (quarter ended Sept. 30, 2025)
$13.5 billion (quarter ended Sept. 30, 2025)
Q4 2025
$40.2 billion (quarter ended Dec. 31, 2025)
$14.4 billion (quarter ended Dec. 31, 2025)
Q1 2026
$35.1 billion (quarter ended March 31, 2026)
$13.2 billion (quarter ended March 31, 2026)
Q2 2026
$39.6 billion (quarter ended June 30, 2026)
$14.2 billion (quarter ended June 30, 2026)
Data source: Financial Modeling Prep. Alibaba Group Holding's figures are converted from Chinese yuan to U.S. dollars. Data as of Sept. 21, 2026.
Foolish Take
Alibaba and Uber are two technology companies experiencing a seismic shift in their businesses due to the artificial intelligence boom. The former maintains steady year-over-year sales growth, but its bottom line is being impacted by the capital expenditures needed to build out its AI infrastructure. For instance, its second-quarter revenue of $39.6 billion represented a 9% increase over 2025, yet its net income dropped 75% to $1.5 billion.
This trade-off makes sense. While Alibaba's mature e-commerce business delivered 4% year-over-year growth in Q2 sales, its AI cloud and compute division experienced an impressive 45% revenue increase compared to 2025. Tracking the Chinese conglomerate's sales in the subsequent quarters will prove essential to understanding the ongoing success of its AI operations.
Uber has established partnerships around the world to support the rise of autonomous vehicles (AVs). On Sept. 3, the company and its AV partner Wayve launched the first self-driving car rides in London.
As it sets up its AI-powered future through AVs, Uber's human-based delivery services business continues to grow at a much faster pace than Alibaba's core e-commerce operations. The ride-hailing company's $14.2 billion in Q2 sales represented 12% year-over-year growth.
Should you buy stock in Alibaba Group right now?
Before you buy stock in Alibaba Group, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alibaba Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $386,781!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,379,943!*
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Robert Izquierdo has positions in Alibaba Group and Uber Technologies. The Motley Fool recommends Alibaba Group and Uber Technologies. The Motley Fool has a disclosure policy.

Alibaba Group vs. Uber Technologies: Examining Quarterly Revenue Trends

China’s artificial intelligence stocks are back in focus after President Trump hosted Chinese President Xi Jinping at the White House on Thursday, with AI emerging as one of the central topics of their meeting.
Along with trade, technology, and other geopolitical issues, Trump and Xi discussed artificial intelligence, with Xi calling for continued dialogue, cooperation, and maintaining human control over the technology.
The two countries also agreed to extend their existing trade truce by two months, although no major breakthrough on AI or technology restrictions was announced.
Still, the importance of technology was evident at the White House state dinner. Among those attending were Nvidia NVDA) CEO Jensen Huang, Advanced Micro Devices AMD) CEO Lisa Su, Tesla TSLA) and SpaceX SPCX) chief Elon Musk, and Apple (AAPL) executive chairman Tim Cook.
Meanwhile, private AI developer DeepSeek has helped demonstrate China's rapid progress in generative AI despite limits on access to advanced U.S. chips. Furthermore, many Chinese AI stocks trade at sizable valuation discounts to their U.S. counterparts, partly reflecting geopolitical and regulatory risks.
That said, here are five publicly traded Chinese AI companies worth watching as the country's AI buildout accelerates.
1. Alibaba – BABA
Alibaba BABA) arguably offers the broadest publicly traded exposure to China's AI infrastructure expansion through Alibaba Cloud, its Qwen models, and its growing portfolio of proprietary AI chips.
Alibaba recently raised roughly $10 billion, with 60% of the proceeds earmarked for global computing infrastructure and the remaining 40% targeting hyperscale AI data centers, storage, databases, and high-performance networking. The company also plans to expand Alibaba Cloud's operated global data-center capacity to more than 20 gigawatts by 2032.
AI Cloud and Compute Services revenue surged 45% year over year to more than $7 billion in Alibaba's latest quarter.
2. Baidu – BIDU
Baidu BIDU) has rapidly shifted from its traditional search business to an AI-first strategy spanning cloud infrastructure, large language models (LLMs), and autonomous driving.
Most notably, Baidu's AI Cloud Infrastructure revenue jumped 50% YoY to $1.1 billion in Q2, while GPU Cloud revenue soared 283%, reflecting strong demand for computing capacity used in AI training and inference.
That makes Baidu one of the most direct large-cap Chinese plays on growing enterprise demand for AI computing.
3. Kingsoft Cloud – KC
Although much smaller than Alibaba and Baidu, Kingsoft Cloud KC) provides perhaps the purest exposure to China's cloud infrastructure expansion among U.S.-listed Chinese stocks.
Kingsoft's AI cloud gross billings surged 82% YoY in Q2 and accounted for 56% of its public cloud revenue, driven by AI infrastructure services and Model-as-a-Service (MaaS) offerings.
For investors specifically tracking China's need for more computing capacity rather than consumer internet businesses, KC is an intriguing name to watch.
4. Tencent – TCEHY
Tencent TCEHY) is another Chinese technology giant investing aggressively across AI models, agents, and cloud infrastructure.
Tencent's Q2 capital expenditures soared 176% YoY to nearly $8 billion, as the company made substantial AI-related compute prepayments to support its Hy models, AI agents, and growing external cloud demand.
Tencent's massive gaming, social-media, and payments businesses make AI infrastructure a less concentrated part of the overall investment story than at Kingsoft Cloud, although its scale gives it significant resources to fund the buildout.
5. Hesai – HSAI
Hesai HSAI) provides a different kind of infrastructure exposure through physical AI.
Rather than operating data centers, Hesai develops lidar, spatial-intelligence technology, and robotic actuation systems that allow autonomous vehicles and robots to perceive and interact with their surroundings.
Hesai now describes itself as a physical-AI infrastructure company spanning the full robotics chain of "see, understand and act," giving investors exposure to the expansion of autonomous mobility and embodied AI.
Honorable Mention: Pony AI & WeRide
Pony AI PONY) and WeRide WRD) are worth monitoring as more direct bets on autonomous driving and robotaxis rather than the underlying cloud buildout.
Pony AI's robotaxi revenue surged 691% year over year in Q2, while its fleet reached nearly 2,000 vehicles.
WeRide's Q2 revenue jumped 82%, while its global Level 4 autonomous fleet had expanded to approximately 3,400 vehicles by the end of July.
Both companies should be significant consumers of AI compute as autonomous-driving systems become increasingly sophisticated.
Bottom Line
The Trump-Xi meeting reinforced just how central artificial intelligence has become to the economic and technological relationship between the United States and China.
Among publicly traded Chinese companies, Alibaba and Baidu provide the broadest combination of AI models, cloud infrastructure, and computing capacity, while Kingsoft Cloud offers more concentrated cloud exposure.
Tencent brings tremendous financial scale, while Hesai, PonyAI, and WeRide extend the opportunity into physical AI, robotics, and autonomous transportation.
As China's AI ecosystem continues to expand despite constraints on access to some advanced U.S. technology, these stocks provide investors with several different ways to monitor the country's accelerating AI buildout.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This innovative software-as-a-service firm upped its user base +22% year over year. That rate is increasing and margins are expanding as AI efficiencies take effect. Of course, all our elite picks aren't winners, but this one could far surpass earlier Zacks' Stocks Set to Double like D-Wave Quantum, which shot up +680.1%.
Free: See Our Top Stock And 4 Runners Up
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This article originally published on Zacks Investment Research (zacks.com).

Trump-Xi Meeting Puts These 5 Chinese AI Stocks in Focus

Alibaba Group BABA is building a much bigger AI story than simply developing another large language model. The company is expanding across the AI stack, from its Qwen models and proprietary chips to cloud infrastructure and overseas markets.
Its latest developments suggest that management is preparing for a much larger role in the global AI race. But with that ambition comes significant investment and execution risk. So, are these developments enough to make BABA stock more attractive after fiscal first-quarter 2027 earnings?
Alibaba Group Holding Limited Price, Consensus and EPS Surprise
Qwen Is Becoming a Bigger AI Asset
Alibaba’s Qwen family remains at the center of its AI strategy. The company is already working on Qwen 4, while future versions like Qwen 5 are designed to scale up to 10 trillion parameters.
Alibaba is also experimenting with recursive self-improvement (RSI), allowing its models to repeatedly refine aspects of their own development. Qwen 3.8-Max model has gone through 33 rounds of RSI, with each cycle allowing the system to improve the model further.
Alibaba’s New AI Chip
Alibaba is also moving deeper into AI infrastructure. Its Zhenwu V900 accelerator is expected to enter commercial use in 2027. Alibaba unveiled the chip yesterday, calling it China’s most powerful AI accelerator as it seeks to strengthen its position in the AI chip market. That matters because Alibaba wants to control more of the AI stack rather than relying entirely on external suppliers.
Alibaba Cloud Takes Its AI Push Global
Per South China Morning Post, Alibaba Cloud is expanding its international footprint, with new data centers planned in Turkey, Finland and the Netherlands. Additional capacity is coming to several existing markets, including Malaysia, Germany, the UAE, France and Hong Kong. This expansion will further broaden Alibaba Cloud’s international footprint as it looks to support rising demand for AI services outside China. The company currently operates 107 availability zones across 31 regions.
According to Gartner, BABA was the world’s fourth-largest cloud IaaS provider by revenues in 2025, behind Amazon AMZN, Microsoft MSFT and Google. Alibaba was the largest cloud IaaS provider in Asia-Pacific, with a 22.5% regional market share.
The company is also expanding its overseas AI product portfolio. Its new tools allow businesses to offer AI services under their own brands, combine multiple models for specific applications and create videos lasting up to an hour in more than 20 languages. Alibaba Cloud is also building partnerships to support its international expansion. Recent collaborations span sectors such as digital entertainment, logistics and enterprise software, giving Alibaba additional channels to bring its technology to businesses outside China.
The overseas push comes at a time when Alibaba Cloud is already seeing strong demand. External cloud revenue growth hit its highest level in several years, while AI-related products have maintained triple-digit year-over-year growth for 12 straight quarters. AI now accounts for more than one-third of Alibaba Cloud’s external revenues. Alibaba is targeting more than 20 GW of global data-center capacity by 2032, underscoring the scale of its ambition.
BABA’s Capex Woes
Alibaba’s AI ambitions require a significant upfront commitment. The company is already working through a RMB380 billion, three-year investment plan, with about RMB190 billion spent by the June quarter. A large portion of the spending is going toward AI infrastructure, including data centers and computing capacity, which means free cash flow is likely to remain under pressure as Alibaba continues expanding.
Our Take
Alibaba is clearly building a broader and more integrated AI ecosystem, with Qwen, chips, cloud infrastructure and international expansion reinforcing one another. Strong AI demand could create a meaningful long-term growth opportunity.
The Zacks Consensus Estimate for BABA’s fiscal 2027 and 2028 EPS implies year-over-year growth of roughly 67% and 40%, respectively.
Image Source: Zacks Investment Research
Still, the scale of investment, uncertain timing of returns and ongoing profitability pressures leave room for execution risk. For now, BABA remains a Zacks Rank #3 (Hold) stock as investors weigh its significant AI opportunity against the capital intensity and time required to realize it.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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BABA Stock After Q1: Can Qwen, Chips & Global AI Expansion Deliver?

Alibaba BABA is accelerating its Quick Commerce business, creating a growing revenue stream that could strengthen the company’s broader e-commerce network. In the June 2026 quarter, China Quick Commerce revenues rose 45% year over year to RMB53.3 billion, driven by Freshippo and Taobao Instant Commerce. Taobao Instant Commerce also improved its unit economics while maintaining market share, supported by higher average order values and better fulfillment efficiency.
The opportunity extends beyond direct Quick Commerce revenues. Alibaba is expanding into higher-value food and non-food categories, while stronger engagement on Taobao can increase monthly active consumers and support customer-management revenues. Freshippo’s continued order and revenue growth, along with deeper integration with Taobao Instant Commerce, further broadens the platform’s supply and product offering.
Quick Commerce could become Alibaba’s Second Growth Curve. Alibaba expects Quick Commerce to eventually contribute around 30% of platform GMV, highlighting its potential to become a major growth engine for the e-commerce business.
The key challenge is profitability. Management expects Quick Commerce to reach overall profitability only in fiscal 2029, meaning rapid revenue growth still requires significant investment before translating into sustained profits.
The Zacks Consensus Estimate for fiscal 2027 revenues is pegged at $166.75 billion, implying 14.66% year-over-year growth. This suggests that Alibaba’s expanding Quick Commerce business could contribute meaningfully to future revenue growth, although converting that scale into sustainable profitability remains crucial.
Amazon and DoorDash Intensify Quick-Commerce Rivalry
Amazon AMZN is expanding its ultrafast-commerce footprint through Amazon Now, offering thousands of everyday essentials within 30 minutes or less. In the second quarter of 2026, Amazon added 80 U.S. cities and towns, reaching more than 250 locations globally, while gross sales and units sold grew over 80% quarter over quarter. This broad selection and faster fulfillment put Amazon directly against Alibaba’s expanding quick-commerce plan.
DoorDash DASH is broadening beyond restaurant delivery into grocery and retail, strengthening its local-commerce challenge. DoorDash says grocery is its fastest-growing marketplace category, while DashMart Fulfillment Services enables controlled inventory and rapid delivery. It also reported near-24/7 warehouse operations and 10-times better error rates, giving DoorDash another route to compete with Alibaba’s quick-commerce model.
BABA’s Share Price Performance, Valuation & Estimates
BABA stock has fallen 20.6% year to date, lagging the Zacks Internet – Commerce industry’s 3.4% gain and the Zacks Retail-Wholesale sector’s 1.4% drop.
BABA’s YTD Price Performance
From a valuation standpoint, BABA stock is currently trading at a forward 12-month Price/Earnings ratio of 16.09X compared with the industry’s 20.92X. BABA has a Value Score of C.
BABA’s Valuation
The Zacks Consensus Estimate for fiscal 2027 EPS is pegged at $6.51, reflecting a 2% upward revision over the past 30 days and projected growth of 67.35% from the prior year.
Alibaba currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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DoorDash, Inc. (DASH) : Free Stock Analysis Report

Alibaba's Quick Commerce Growth Accelerates: Can It Boost Revenues?

The NASDAQ 100 Pre-Market Indicator is down -90.2 to 30,642.2. The total Pre-Market volume is currently 102,035,158 shares traded.
The following are the most active stocks for the pre-market session:
IonQ, Inc. (IONQ) is +4.72 at $45.46, with 5,366,050 shares traded. As reported by Zacks, the current mean recommendation for IONQ is in the "buy range".
Grab Holdings Limited (GRAB) is +0.03 at $3.20, with 4,047,188 shares traded. As reported in the last short interest update the days to cover for GRAB is 8.284295; this calculation is based on the average trading volume of the stock.
ProShares UltraPro Short QQQ (SQQQ) is +0.2734 at $33.57, with 3,707,792 shares traded., following a 52-week high recorded in prior regular session.
ProShares UltraPro QQQ (TQQQ) is -0.614 at $80.06, with 3,158,837 shares traded. This represents a 114.52% increase from its 52 Week Low.
Greenland Energy Company (GLND) is +0.1495 at $2.66, with 3,028,406 shares traded. As reported by Zacks, the current mean recommendation for GLND is in the "strong buy range".
Nokia Corporation (NOK) is -0.08 at $10.74, with 2,941,233 shares traded. As reported by Zacks, the current mean recommendation for NOK is in the "buy range".
NVIDIA Corporation (NVDA) is -1.1777 at $227.69, with 2,407,866 shares traded. Over the last four weeks they have had 9 up revisions for the earnings forecast, for the fiscal quarter ending Oct 2026. The consensus EPS forecast is $2.47. As reported by Zacks, the current mean recommendation for NVDA is in the "buy range".
Intel Corporation (INTC) is -1.71 at $122.15, with 2,314,791 shares traded. INTC's current last sale is 107.62% of the target price of $113.5.
BitMine Immersion Technologies, Inc. (BMNR) is -0.67 at $28.09, with 1,630,844 shares traded. As reported by Zacks, the current mean recommendation for BMNR is in the "buy range".
Alibaba Group Holding Limited (BABA) is -4.23 at $112.08, with 953,632 shares traded. As reported by Zacks, the current mean recommendation for BABA is in the "buy range".
Haleon plc (HLN) is -0.03 at $9.22, with 771,183 shares traded. HLN's current last sale is 81.59% of the target price of $11.3.
BlackBerry Limited (BB) is +0.09 at $8.71, with 745,958 shares traded.BB is scheduled to provide an earnings report on 9/24/2026, for the fiscal quarter ending Aug2026. The consensus earnings per share forecast is 0.03 per share, which represents a 3 percent increase over the EPS one Year Ago

Pre-Market Most Active for Sep 23, 2026 : IONQ, GRAB, SQQQ, TQQQ, GLND, NOK, NVDA, INTC, BMNR, BABA, HLN, BB

(RTTNews) - Alibaba (BABA) intelligence chip and announced plans to significantly expand its data center capacity as it strengthens its AI infrastructure business.
At its annual Apsara conference in Hangzhou, Alibaba introduced the Zhenwu V900, which the company said delivers three times the performance of its predecessor, the M890.
The chip is scheduled for mass production and commercial release in the first quarter of 2027 and can be connected in clusters of up to 500,000 chips for training and running large AI models.
Alibaba also said it plans to expand Alibaba Cloud's global data center capacity to more than 20 gigawatts by 2032. CEO Eddie Wu said demand for AI services was exceptionally strong, while supply constraints were limiting the pace of expansion.
The company is also developing larger Qwen AI models, with future Qwen 4.5 and Qwen 5 models expected to reach 5 trillion to 10 trillion parameters, compared with 2.4 trillion for its current flagship Qwen 3.8 Max.

Alibaba Unveils New AI Chip, Plans 20-Gigawatt Data Center Expansion

Alibaba Group BABA continues to trade at a premium price-to-sales multiple relative to its sector, a valuation gap that has left investors debating whether the stock still deserves a place in growth portfolios or whether a better entry point lies ahead. BABA is currently trading at a forward 12-month price-to-sales ratio of 1.64, above the Zacks Retail-Wholesale sector’s average of 1.42. The company carries a Value Score of C.
Rather than chasing the stock at current levels or exiting altogether, the more balanced approach for existing shareholders is to hold, anchored not in near-term price action but in the structural shifts underway across Alibaba's cloud, e-commerce and AI businesses. Three fundamental threads support this stance.
BABA’s Premium P/S Valuation
Cloud and AI Commercialization Is Accelerating, Not Slowing
Alibaba's cloud segment has moved from a promising growth story to a demonstrably accelerating one. External cloud revenue growth reached a multi-year high in the June quarter, with AI-related product revenues sustaining triple-digit year-over-year growth for 12 consecutive quarters and now representing more than a third of external cloud revenues. This is not incidental growth; it reflects deepening enterprise adoption of Alibaba's Model-as-a-Service platform and proprietary chip stack. Holding through the current investment cycle allows shareholders to participate in this compounding monetization curve rather than stepping aside just as scale economics begin to show through in margins.
Core Commerce Remains a Cash Engine as Quick Commerce Grows
While quick commerce investment continues to weigh on near-term profitability, Alibaba's e-commerce base is not deteriorating; it is being reorganized to capture new consumption patterns. Customer management revenue growth has held up on a like-for-like basis, and the newly consolidated e-commerce structure is designed to extract synergies across domestic and cross-border platforms rather than let them compete for the same resources. This underlying resilience in the core commerce engine gives the company the cash generation capacity to fund its AI ambitions without relying solely on external capital, a fundamental stabilizer that supports a hold rather than an exit.
Disciplined Long-Term Capital Allocation Toward AI Infrastructure
Elevated capital expenditure has compressed free cash flow and near-term earnings, but management has framed this spending within a defined multi-year AI infrastructure plan rather than open-ended outlays. The company has articulated a payback framework for AI-related capex based on current gross margins, with potential for that payback period to shorten as proprietary chip penetration increases and pricing power strengthens. This structured approach to reinvestment, rather than reactive spending, is a fundamental reason long-term holders can tolerate near-term margin pressure.
BABA’s Cloud, E-Commerce and AI Developments
Across its reporting segments, recent company disclosures point to broadening momentum. In cloud and AI, Alibaba used its September 2026 Apsara Conference to outline its next-generation Qwen roadmap, confirming that its upcoming Qwen 4 model is already in training, with future Qwen 4.5 and Qwen 5 versions projected to scale toward 5-10 trillion parameters. The event also introduced a new proprietary AI chip alongside an agentic cloud architecture and a mobile AI agent platform, reinforcing the company's full-stack ambitions from chips to applications. In e-commerce, Alibaba has continued integrating Taobao Instant Commerce more tightly with its broader ecosystem, including its Qwen app, while its restructured China E-commerce Group works to unify Taobao, Tmall and international platforms such as AliExpress, Trendyol and Lazada under a shared consumption framework. On the AI applications front, the company released an updated open-weight image-generation model in September 2026, aimed at commercial design and e-commerce marketing use cases, extending its AI tools deeper into merchant workflows.
BABA’s Forward Guidance and Capital Spending
For its first-quarter fiscal 2027, Alibaba reported sharply higher capital expenditure year over year as it continues drawing down a previously announced three-year AI infrastructure investment plan, with a meaningful portion of that multi-year budget already deployed. Management guided that cloud revenue growth is expected to keep accelerating in coming quarters, with EBITDA margins expanding sequentially, and reiterated a longer-term ambition of a much larger external cloud revenue base with materially higher margins by decade's end. Quick commerce losses are expected to keep narrowing, with a path to overall profitability targeted in the coming fiscal years, while its Model-as-a-Service annualized revenue run rate is targeted to roughly double by fiscal year-end.
The Zacks Consensus Estimate for fiscal 2027 earnings is pegged at $6.87 per share, implying 76.61% year-over-year growth, a key core reason holding through this pullback still carries fundamental merit.
Alibaba Group Holding Limited Price and Consensus
BABA's Share Price Performance and Competitive Landscape
BABA shares have plunged 18.6% year to date, underperforming the Zacks Internet – Commerce industry's 3.4% growth and the Retail-Wholesale sector's 1.4% decline, reflecting broad risk-off sentiment toward Chinese technology equities generally this year.
Competitively, Alibaba Cloud battles Amazon AMZN, Microsoft MSFT and Alphabet GOOGL-owned Google for enterprise AI workloads; Amazon's AWS and Microsoft's Azure still command greater global hyperscale share, while Google keeps expanding AI-native infrastructure, so pricing pressure stays elevated as Alibaba, Amazon, Microsoft and Google all pour heavy capital into compute capacity, and this scale gap is one reason to hold rather than chase shares higher right now.
BABA’s Year-to-date performance
Conclusion
Alibaba's premium price-to-sales ratio reflects the market's recognition of a business in the middle of a genuine transformation, not merely a legacy e-commerce operator carrying a rich multiple. The fundamental case for holding rests on accelerating cloud and AI monetization, a core commerce base stable enough to self-fund that transformation, and a capital allocation framework built around a defined payback horizon rather than unchecked spending. None of this eliminates near-term risk. Heavy capital expenditure will keep pressuring free cash flow, and quick commerce profitability will take meaningful time to fully materialize across the entire business. But for investors who already own the stock, these fundamental drivers are reasons to stay patient through the investment cycle rather than reasons to sell now.
New investors weighing a fresh entry may still prefer to wait for the current spending cycle to show a clearer margin payoff before committing, but existing shareholders have sufficient fundamental support to hold Alibaba stock through this phase rather than exit prematurely today. Alibaba currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).

Alibaba Group Holding Limited

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