Alibaba’s AI Breakthrough Fuels Stock Momentum

Alibaba has made a significant advancement in the global artificial intelligence race, unveiling its most powerful AI model to date. This technological leap has generated substantial market enthusiasm, raising questions about its potential to drive sustainable gains for the company’s shares.

Strategic Positioning in the AI Landscape

The Chinese technology giant’s new Qwen-3-Max-Preview model represents a monumental technical achievement, surpassing one trillion parameters for the first time. This dramatic increase from its previous maximum of 235 billion parameters establishes Alibaba as a formidable competitor against established AI leaders like OpenAI and Google DeepMind. The timing appears strategically calculated as China pushes for technological sovereignty, with Alibaba demonstrating its capability to independently develop cutting-edge technology.

Cloud Division Powers Expansion

This AI advancement builds upon an already robust foundation within Alibaba’s cloud computing segment. The division has recorded triple-digit growth in AI-related revenue for eight consecutive quarters. Despite global supply chain challenges, the unit posted solid 6 percent growth in 2025. This performance has garnered positive analyst attention, with Bank of America recently raising its price target to $152, citing expanding AI capabilities and continued cloud infrastructure investments.

The company has committed to an ambitious three-year investment program totaling 380 billion RMB toward AI and cloud infrastructure development, underscoring its long-term commitment to these transformative technologies.

Should investors sell immediately? Or is it worth buying Alibaba?

E-Commerce Challenges Persist

Not all segments are performing equally well. The domestic e-commerce sector faces intense price competition, with industry reports describing an “instant retail” battle that consumed over $4 billion across the sector in the second quarter alone. These aggressive discounting strategies are pressuring near-term profitability and could potentially offset some gains from the company’s AI initiatives.

Market Analysts Maintain Confidence

Despite these headwinds, Wall Street sentiment remains optimistic. The average price target of $153.62 suggests approximately 26 percent upside potential. Benchmark analyst Fawne Jiang took an even more bullish stance, raising her target to $195 while maintaining a “Buy” rating, based on AI progress and cloud growth prospects.

All eyes will be on the upcoming quarterly results scheduled for November 21st. Investors will be looking for clear signals regarding how much AI investments are contributing to revenue growth and how management plans to navigate the competitive pressures in e-commerce.

Alibaba’s technological demonstration proves the company can compete at the highest levels of global AI development. However, after already delivering a 43 percent year-to-date gain, the stock’s continued advancement will depend on the company’s ability to successfully monetize these technological achievements.