Alibaba Group Holding (BABA) has officially responded to reports linking it to a U.S. investigation involving the alleged smuggling of restricted Nvidia (NVDA) AI chips into China. According to the report, U.S. authorities suspect that servers containing advanced Nvidia chips were routed through Thailand-based OBON Corp. to bypass export controls.
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Forget margin or options. Here's how the pros trade NVDAThe investigation stems from a March 2026 indictment in which U.S. prosecutors accused individuals tied to Super Micro Computer (SMCI) of routing servers through Taiwan and Southeast Asia before shipping them into China. Prosecutors allege that more than $2.5 billion worth of AI technology moved through the network, including over $500 million shipped between April and mid-May 2025.
The development follows a Bloomberg report stating that Alibaba was allegedly one of multiple end customers that received some of the servers involved in the investigation.
Alibaba’s Official Response
In a statement issued on Friday, May 8, Alibaba clarified its position regarding the firms named in the U.S. investigation. The company emphasized that it maintains a “compliance-first” approach to its data center operations:
It told Reuters that it has no business relationship with Super Micro, OBON, or any third-party brokers named in the indictment. Alibaba also said it does not use, and has never used, banned Nvidia chips in its data centers.
While the U.S. Justice Department has previously indicted individuals associated with Super Micro, Alibaba has not been formally charged with any wrongdoing. The company’s statement seeks to resolve market speculation before it reports to shareholders.
All Eyes on Alibaba’s Q4 Earnings on May 13
The report comes just days before Alibaba is set to release its Q4 2026 earnings on May 13. Wall Street analysts expect earnings of $0.90 per share, down from $1.83 in the year-ago quarter. Meanwhile, revenue is projected at about $36.33 billion, representing an 11% year-over-year increase.
Analysts will closely watch the company’s cloud and AI business, especially as investors look for signs that Alibaba’s AI growth strategy continues gaining momentum despite rising geopolitical pressure.
Is BABA Stock a Good Buy?
Wall Street remains constructive on the stock. Alibaba carries a Strong Buy consensus rating based on 14 Buy ratings and two Holds over the past three months. The average BABA price target stands at $184.07, suggesting roughly 30.55% upside from current levels.
