Alibaba (BABA) (HK:9988) stock jumped more than 7% in Hong Kong trading on Friday, its biggest gain in two weeks, following a rally in the U.S. market. The stock is now up more than 80% this year. The move shows how investors are backing Alibaba’s push into artificial intelligence, even as its price wars in food delivery and e-commerce continue.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
BABA Raises Billions for AI
This week, Alibaba raised $3.2 billion in convertible bonds to fund China’s AI infrastructure project and cloud platform. It also rolled out new versions of its Qwen AI models, aimed at competing with systems from DeepSeek and OpenAI.
Adding to the momentum, The Information reported that both Alibaba and Baidu (BIDU) have started using in-house chips to train AI models, reducing reliance on costly Nvidia (NVDA) processors. Baidu shares also rallied, rising nearly 13% in Hong Kong to their highest since October 2024.
Analysts See Strong Potential in AI
Paul Pong, managing director at Pegasus Fund Managers, said Alibaba’s latest steps have shifted focus to its AI growth. “With the capability of producing its own chips, it should create more growth drivers,” Pong said.
Also, Jefferies analyst Thomas Chong reiterated a Buy rating on the stock and raised his price target to $178 from $165, implying 21% upside. The 5-star analyst highlighted that Alibaba Cloud remains a key driver. According to industry research firm Omdia, Alibaba holds a 35.8% share of the AI cloud market — larger than its next three competitors combined. Chong also noted that AI-related revenue already makes up more than 20% of Alibaba’s external cloud sales, growing at a triple-digit pace. Jefferies expects this rapid growth to continue, helping Alibaba strengthen its position in building full-stack AI infrastructure.
Furthermore, global optimism around AI is helping the stock trend higher. Recently, Oracle (ORCL) gave a strong outlook for AI spending during its Q1 earnings call, sparking a sector-wide rally that further lifted Alibaba.
What Is the Price Target for BABA Stock?
Analysts remain bullish about Alibaba’s stock trajectory. With 17 Buy ratings and one Hold rating, BABA stock commands a Strong Buy consensus rating on TipRanks. Also, the average Alibaba price target of $165.69 implies about 6.59% upside potential from current levels.
