Alibaba ( (BABA) ) has been popular among investors this week. Here is a recap of the key news on this stock.
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Alibaba filed a Form 6‑K noting a small issuance of 668,000 new shares to a director under its equity incentive plan, lifting total shares to about 19.19 billion and causing only minimal dilution for investors. The company, which has no treasury shares or recent buybacks, continues to rely on stock-based pay for senior executives while maintaining a hefty market cap of roughly $323 billion.
Despite a recent free‑cash‑flow deficit and sharply weaker Q4 FY26 earnings, Wall Street still sees Alibaba as undervalued, with an average target near $190 implying about 40% upside. TipRanks’ AI tool Spark is Neutral on BABA due to pressured margins and cash flow, but human analysts largely rate it a Strong Buy, arguing that today’s depressed profits reflect an intense, deliberate investment cycle rather than a broken business model.
At its annual cloud summit, Alibaba unveiled the Zhenwu M890 AI chip, built by its T‑Head unit to reduce reliance on Nvidia and U.S. exports, claiming triple the performance of its prior chip. Management also laid out an ambitious roadmap with the V900 chip planned for 2027 and J900 for 2028, while pledging more than $53 billion over three years to AI and cloud infrastructure.
The tech giant also rolled out Qwen 3.7‑Max, a new version of its flagship AI model optimized for coding and advanced tasks and capable of running up to 35 hours without degradation. These launches underscore Alibaba’s push to build a full AI stack – from chips to cloud to models – as it fights for share in China’s fast‑growing AI infrastructure market.
Recent results showed adjusted net profit plunging about 99.7% and adjusted EBITDA falling 84%, with free cash flow turning negative as Alibaba accelerated spending on cloud, AI and quick‑commerce subsidies. Bears point to shrinking margins in Taobao and Tmall and ongoing geopolitical and regulatory risks, including U.S. chip export controls, as reasons to stay cautious on Chinese tech.
Supporters counter that cloud revenue grew 38% and external customer sales 40%, helped by triple‑digit growth in AI products, suggesting strong underlying demand for Alibaba’s cloud infrastructure. Quick‑commerce revenues jumped 57% as the company subsidized “Taobao Instant Commerce” deliveries, indicating that heavy current spending is buying future volume and engagement rather than masking a collapse in demand.
Analysts project EPS to rebound to about $6.80 in FY27 and $9.22 in FY28, putting Alibaba on a forward P/E near 19.5x and 14.4x, a steep discount to its roughly 28x five‑year historical average. For investors willing to tolerate China risk and near‑term volatility, the combination of depressed multiples, aggressive AI investment and strong analyst conviction makes Alibaba a high‑beta, long‑term growth bet rather than a value trap.