Alibaba is back in the spotlight – U.S.-traded stocks have soared nearly 70% so far, a preference for Chinese artificial intelligence. The company said on Thursday that AI-related product revenue increased triple-digits in the sixth quarter of the period ended in December. Its QWEN AI model has proven itself a competent competitor to DeepSeek and has won a deal for iPhones sold in China. Founder Jack Ma, who once had a political situation, held his latest public conflict on February 17 – a rare meeting with entrepreneurs in China’s seats, including Deepseek Liang Wenfeng. Several analysts believe Alibaba’s earnings will continue, with Jefferies targeting $156 as of February 20. That’s more than 8% compared to Friday’s closing price of $143.75. UBS stock strategists said Thursday that they have switched to Alibaba’s PDD in their model portfolio, “because of its exposure to AI and quantum factors.” Remember a few months ago, Temu’s parents had a bigger market capitalization, raising concerns about Alibaba’s struggle to compete for its core e-commerce business? Taobao and Tmall Group saw sales rise by 5% in the latest quarter. Although many investors are excited about China’s AI opportunities, so far this year, the crowds of people squeezed into related stocks have only been 0.02 times. UBS said that is well below 0.2 of the crowded scores of AI-related names in the past two years. Alibaba scored the highest crowding score among China’s large internet technology names, the report said. “Analysis by our Quant team previously showed that recent outperforms in stocks with reasonable but improved crowded stocks.” Hong Kong’s Hang Seng Index reached a three-year high in the locally traded stock leads of Unicom, Lenovo and Alibaba on Friday . “Should investors rotate from Alibaba to AI trade laggers (i.e. Tencent and Baidu)?” We think, Both Tencent and Baidu’s stock prices can be driven by AI development with different risks. “So far, U.S.-listed Baidu shares have risen about 8%, although the company shared on February 18, its AI cloud revenue rose 26% year-on-year to RMB 7.1 billion in the fourth quarter. No earnings for the period have been reported, Hong Kong stocks have not reported earnings of about 24% in the period so far. JPMorgan is neutral on Baidu, but is overweight for Tencent and Alibaba. The company’s Alibaba share price target Priced at $125, which indicates a 13% drop from Friday’s closing price. At least four major investment companies have a buy rating for Alibaba. However, Morgan Stanley’s equivalent weight and $100 Price targets are particularly cautious. This means a 30% drop from the end of Friday. The company noted that Alibaba’s capital expenditure accounted for 11% of revenue in the most recent quarter compared to 3% in the previous quarter, a warning from management Potential weights of future profit margins. Morgan Stanley also highlights risks such as weaker consumption and slower digitization of businesses. – Michael Bloom of CNBC made the report Contributions.
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