Alibaba stock jumped by 3% on Tuesday in Hong Kong as investors reacted to news from its Apsara Conference in Hangzhou. BABA jumped to $118.5, its highest level since August 21 and 13.45% above its lowest level in September. So, is this the start of a bull run?
Alibaba stock jumps as it unveils AI chip
Alibaba, one of the biggest companies in China, rose after the company announced a new chip and a plan to expand its data centers in the country. The company unveiled Zhenwu V900, its next-generation AI chip that delivers three times the performance of Zhenwu M890, which it released in May. This chip will enter full production in the first quarter of next year.
Alongside this release, the company said that it will expand Alibaba Cloud’s global data center capacity to more than 20 gigawatts by 2032. This expansion is aimed at growing its market share in the AI industry.
Alibaba has become one of the biggest players in the AI industry, with its models having more downloads than those of other companies like Meta Platforms and X. They have had over 3 billion downloads in the past few months.
At the same time, the models have become highly advanced, with Qwen 3.8 Max having a context window of close to 1 million. Its average cost per token is $5.41, making it cheaper than those made by Anthropic.
The most recent results showed that Alibaba’s revenue jumped by 9% in the second quarter to $39.63 billion. This growth was driven by its AI Cloud and Compute Services, which made $7.13 billion, helped by the adoption of its AI solutions. Alibaba maintains close to 40% market share in the cloud industry in China.
The challenge, however, is that the AI business is facing stiff competition in China, with top companies in the industry like MiniMax, DeepSeek, and Moonshot gaining market share.
Alibaba Group challenges remain
BABA stock has remained under pressure this year and is down by 35% from its highest level this year. This retreat is mostly because its core e-commerce business is not growing as fast as it did in the past. Its e-commerce group made over $16.3 billion in the second quarter, down by 8% on an annual basis.
The company is also spending substantial sums of money to gain its market share in the AI industry. It recently announced a plan to raise $10 billion through a share sale, continuing to dilute its shareholders.
Analysts are highly bullish on the BABA stock. Bernstein, Susquehanna, Barclays, and JPMorgan boosted their outlook for the stock, citing the ongoing AI growth.
Alibaba share price technical analysis
BABA stock chart | Source: TradingView
Technicals suggest that Alibaba stock may be on the cusp of a bullish breakout in the near term. A closer look shows that it formed an inverted head-and-shoulders pattern, a highly bullish pattern. This pattern often leads to a strong reversal over time.
Alibaba has moved above the 50-day moving average, while the Relative Strength Index (RSI) has moved above the neutral level of 50. Therefore, the stock will likely have a strong bullish breakout in the near term, potentially to $150.
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