Alibaba (BABA) stock edged higher in pre-market trading on Wednesday after the Chinese cloud computing giant introduced a new artificial intelligence chip at its annual cloud summit to reduce dependence on Nvidia (NVDA) processors.
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Explore NVDS for 2X short leverage on NVDAThe new chip, called the Zhenwu M890, was developed by Alibaba’s chip unit T-Head and is designed for AI “agents” — systems that can handle complex tasks with limited human input. Alibaba said the chip delivers about three times the performance of its earlier-generation processor.
The move comes as U.S. export restrictions continue limiting China’s access to advanced AI chips from American companies.
Alibaba Reveals Bigger AI Ambitions
Alibaba also shared a long-term roadmap for its AI chip business. The company plans to launch the next-generation V900 chip in 2027, followed by the J900 in 2028. Alibaba said the V900 is expected to be another three times faster than the newly launched M890.
The company has been rapidly expanding its AI business as competition in China’s AI market intensifies. Last year, Alibaba pledged to invest more than $53 billion in AI and cloud infrastructure over the next three years.
At the summit, Alibaba also introduced Qwen 3.7-Max, the latest version of its flagship AI model designed for coding and advanced AI tasks. The company said the model can run continuously for up to 35 hours without performance issues.
AI Spending Remains a Key Investor Focus
Alibaba’s latest AI push comes shortly after the company reported weaker-than-expected Q4 FY26 results. Heavy spending on AI and e-commerce continued to pressure profits, even as Alibaba’s cloud and AI business delivered strong growth.
Even so, Wall Street analysts remain optimistic about Alibaba’s long-term AI opportunity. Several firms recently raised their price targets on BABA stock, pointing to strong growth in AI-related cloud revenue and rising demand for AI infrastructure services.
The latest chip launch highlights Alibaba’s growing focus on AI infrastructure as competition with Nvidia and other global AI leaders continues to intensify. Investors are now watching whether the company’s aggressive AI investments can help drive stronger cloud growth ahead.
Is Alibaba Stock a Buy Now?
Wall Street remains constructive on the stock. Alibaba stock carries a Strong Buy consensus rating based on 16 Buy ratings and two Holds over the past three months. The average BABA price target stands at $189.89, suggesting roughly 40% upside from current levels.
