Alibaba’s AI Gambit: A Strategic Shift in China’s Tech Race

As Alibaba prepares to release its quarterly earnings on November 25th, the Chinese e-commerce titan is making aggressive moves in the artificial intelligence space. The company has launched a new consumer-facing AI application called “Qwen App,” signaling a dramatic departure from its previous enterprise-focused approach and setting the stage for direct competition with domestic rivals.

Regulatory Headwinds and Mixed Analyst Sentiment

New antitrust guidelines introduced by China’s market regulatory authority on November 15th have created additional challenges for internet platforms. The regulatory body specifically highlighted “frequent monopoly risks in the platform economy sector,” delivering a clear warning to technology behemoths like Alibaba.

Financial experts remain divided on the company’s prospects. Among 39 analysts covering the stock, the average price target stands at $198.19, representing approximately 25% upside from current levels. However, the wide dispersion of estimates—ranging from $119.85 to $271.11—underscores significant uncertainty about proper valuation. Zacks Investment Research has taken a particularly bearish stance, assigning a “Strong Sell” rating based on elevated valuation multiples coupled with unpredictable profitability.

Quarterly Expectations Amidst Annual Gains

Despite impressive stock performance throughout 2025, with shares advancing between 80% and 90% year-to-date, expectations for the upcoming quarterly report remain cautious. Market researchers project earnings per share between $0.66 and $0.85—a substantial decline compared to the $2.10 reported during the same period last year. Revenue forecasts of $34.3 to $34.4 billion suggest modest growth of just 2% to 4%.

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

The equity’s strong performance this year has been primarily fueled by robust e-commerce operations and increasing demand for cloud and AI services. During the first quarter of fiscal year 2026, cloud revenues expanded by 26% to reach 33.4 billion yuan, providing a bright spot amid challenges in core business segments.

Consumer AI: Playing Catch-Up in a Crowded Market

The November 18th launch of Qwen App represents a fundamental strategic pivot for Alibaba. Available free of charge across iOS, Android, web, and PC platforms in China, the application leverages the company’s most advanced language model and promises to become “the best personal AI assistant.” Capabilities include generating comprehensive research reports and polished PowerPoint presentations within seconds based on user commands.

This offensive marks a radical departure from Alibaba’s historical focus on enterprise clients through its cloud division, where consumer applications previously received minimal attention. The consequences of this neglect became evident in recent usage statistics: Alibaba’s existing consumer AI offering, “Tongyi,” attracted just 6.96 million monthly active users in September 2025. By comparison, ByteDance’s Doubao app dominated with 150 million users, while DeepSeek recorded 73.4 million and Tencent reached 64.2 million.

The Monday Verdict

All eyes will be on Alibaba’s November 25th earnings release to determine whether growth in cloud computing and artificial intelligence can offset persistent challenges in the company’s core e-commerce operations. Weak consumer spending, intense price competition, and macroeconomic headwinds in China continue to pressure traditional business lines. The critical question remains: Can this new AI initiative catalyze a genuine turnaround, or will it become another contender in China’s saturated artificial intelligence marketplace? The answer will likely determine whether the stock’s impressive 2025 rally reflects sustainable momentum or merely represents premature optimism about unfulfilled AI promises.