Investor sentiment toward Alibaba has cooled despite a bold new push into artificial intelligence, underscored by a rare public appearance from co-founder Jack Ma. The e-commerce titan’s aggressive spending to promote its AI platform is raising fresh concerns about profitability, overshadowing the strategic move.
Jack Ma’s Symbolic Endorsement
Adding significant weight to the company’s AI focus, Jack Ma visited Alibaba’s headquarters in Hangzhou on Thursday, February 5. His presence was notable given his withdrawal from daily operations in recent years. He met directly with the project team behind the AI Spring Festival initiative, a move widely interpreted as a powerful signal of internal prioritization. This personal endorsement aligns with CEO Eddie Wu’s designation of the AI division as a critical engine for future expansion.
The “Spring Festival Treat Plan”: A Multi-Million Euro Play
The core of the market’s apprehension is Alibaba’s newly launched “Spring Festival Treat Plan.” The campaign, which commenced officially on February 6, represents one of the single largest investments in the firm’s history. The company is allocating approximately 3 billion RMB (roughly 415 million euros) to subsidize and offer free services for its generative AI application, Qianwen, during the holiday period.
This massive outlay is a direct competitive salvo in China’s intensifying AI race, where rivals like Tencent, Baidu, and ByteDance are also vying aggressively for market dominance. Industry observers characterize the strategy as a classic user acquisition war, where near-term profitability is sacrificed to purchase market share.
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Sector-Wide Skepticism Weighs on Shares
The stock has failed to rally on the news, reflecting broader sectoral pressures. Technology investors are increasingly scrutinizing the soaring costs associated with AI infrastructure and customer acquisition campaigns. The central debate is whether the high “burn rate” to attract users is justified or if it will meaningfully dilute returns on invested capital (ROIC).
Alibaba’s shares are currently trading at €138.60, a level that sits approximately 14% below its 52-week peak. From a technical analysis perspective, the price has dipped slightly below its 50-day moving average, highlighting near-term uncertainty.
Key Developments at a Glance
- Strategic Move: Launch of a major holiday marketing campaign, the “Spring Festival Treat Plan.”
- Financial Commitment: An investment of around 3 billion RMB aimed at user growth for the Qianwen AI app.
- Leadership Signal: An uncommon headquarters visit by co-founder Jack Ma to support the AI team.
- Market Reaction: Share price pressure driven by worries over escalating costs.
The efficacy of this substantial expenditure is now the primary focus. The critical factor for the stock’s trajectory will be whether the billion-yuan investment merely generates short-term traffic or successfully builds a loyal, long-term user base for Alibaba’s ecosystem. By the time the company reports its quarterly earnings—anticipated for February 19, 2026—management will need to provide concrete data proving that this expensive growth strategy is paying off.
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