• In recent days, Alibaba Group has benefited from Chinese regulators’ probe into food-delivery competition and fresh policy support for artificial intelligence and cloud, including the “AI+ Manufacturing” action plan and potential approval of Nvidia H200 chip imports into China.
• At the same time, explosive global adoption of Alibaba Cloud’s Qwen AI models and new AI services for restaurants underline how its open-source and applied AI capabilities are becoming a core pillar of its broader commerce and cloud ecosystem.
• Next, we’ll examine how the AI+ Manufacturing push and Qwen’s surging adoption could reshape Alibaba’s investment narrative around cloud-led growth.

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Alibaba Group Holding Investment Narrative Recap

To own Alibaba today, you need to believe that its heavy spending on AI and cloud can eventually support the wider commerce ecosystem, without permanently compressing margins. The latest AI+ Manufacturing push and Qwen momentum support the cloud growth story, while the food delivery probe may ease subsidy pressure but does not materially change the key near term catalyst or the biggest risk, which remains rising investment and uncertain payback in AI, cloud and quick commerce.

Against this backdrop, China’s AI+ Manufacturing action plan stands out, as it is explicitly geared toward driving factories onto cloud and AI services, where Alibaba is already reporting strong cloud and AI product growth. For me, this ties the policy backdrop directly to Alibaba’s core catalyst around cloud led expansion, while keeping the spotlight on whether intensified capital expenditure and execution can translate into durable returns.

Yet investors should also be aware that Alibaba’s heavy AI and cloud spending could strain profitability if...

Alibaba Group Holding's narrative projects CN¥1,260.3 billion revenue and CN¥171.1 billion earnings by 2028. This requires 8.0% yearly revenue growth and about CN¥22.8 billion earnings increase from CN¥148.3 billion today.

Uncover how Alibaba Group Holding's forecasts yield a $195.12 fair value, a 17% upside to its current price.

Exploring Other Perspectives

Seventy seven fair value estimates from the Simply Wall St Community span roughly US$107 to US$279 per share, reflecting very different views on Alibaba’s potential. When you set those against the company’s large AI and cloud investment plans, it underlines how important it is to compare multiple perspectives before forming your own view on Alibaba’s future performance.

Explore 77 other fair value estimates on Alibaba Group Holding - why the stock might be worth as much as 67% more than the current price!

Build Your Own Alibaba Group Holding Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Alibaba Group Holding research is our analysis highlighting 3 key rewards that could impact your investment decision.
• Our free Alibaba Group Holding research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Alibaba Group Holding's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.