Shares in Chinese tech group Alibaba (BABA) climbed nearly 4% in pre-market trading today on hopes that President Xi is ready to support private firms in their battle to gain AI ascendancy.
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Tech Leaders Had Meeting With Xi
BABA stock was lifted higher a day after co-founder Jack Ma was one of over 20 tech titans who were invited to a meeting in the capital Beijing with President Xi. This was notable as despite being a supporter of private business in his first few years as leader Xi has in recent times favored the development of state enterprises. He has called on private companies to follow his theme of “common prosperity” in which they should share the fruits of their success with the people. This has led to a cooling down in the ambition and confidence of private firms with Ma largely withdrawing from public life after he faced severe criticism for a speech in 2020 where he blasted state regulators.
However, it seems that Xi, responding to U.S. advancements in AI technology, the state of the Chinese economy and tariffs pressure from President Trump has changed course.
Xi Promises to Remove “Obstacles”
At yesterday’s meeting, which also saw invites to Tencent’s (TCEHY) boss Pony Ma, BYD’s (BYDDY) Wang Chuanfu, Meituan’s Wang Xing, Xiaomi Corp chief Lei Jun, Wang Xingxing of robotics startup Unitree, DeepSeek founder Liang Wenfeng, and Huawei founder Ren Zhengfei, Xi urged the leaders to “maintain their competitive spirit.” As reported by Reuters Xi said the tech titans should have confidence in the country’s future stating that the challenges they faced were “temporary.” He promised to abolish unreasonable fees or fines against private firms and level the competitive playing field with state-owned firms. Indeed, yesterday China’s parliament said it would review laws centered on promoting the private economy.
“It is necessary to resolutely remove all kinds of obstacles to the equal use of production factors and fair participation in market competition,” Xi told the entrepreneurs. “Beijing should continue to make great efforts to solve the problem of difficult and expensive financing for private enterprises.” Although unlikely to let private firms have the freedom they enjoyed pre-2020, more state support would be a positive boost to their investment plans and signal an increased challenge to U.S. rivals.
Is BABA a Good Stock to Buy?
On TipRanks, BABA has a Strong Buy consensus based on 7 Buy and 1 Hold rating. Its highest price target is $151. BABA stock’s consensus price target is $129.13 implying an 3.53% upside.
