Key Stats for Alibaba Stock
- Price Change for $BABA stock: 2.4%
- Current Share Price: $166
- 52-Week High: $167
- $BABA Stock Price Target: $167
What Happened?
Alibaba (BABA) stock surged over 2% following reports that China Unicom, the country’s second-largest telecommunications company, will deploy Alibaba’s AI accelerator chips from its semiconductor unit T-Head (Pingtouge) in a major new data center project.
The partnership was revealed through Chinese state broadcaster CCTV, with a person familiar with the matter confirming the report’s accuracy to CNBC.
This development comes as China intensifies efforts to reduce dependence on foreign semiconductors for AI applications.
According to the Financial Times, China’s internet regulator has instructed companies to stop purchasing certain Nvidia AI chips, underscoring the strategic importance of domestic alternatives, such as Alibaba’s offerings.
The timing coincides with Alibaba’s strong Q1 earnings results, where Cloud Intelligence Group revenue accelerated 26% year-over-year, with AI-related products maintaining triple-digit growth for the eighth consecutive quarter.
During the quarter, AI-related revenue accounted for over 20% of external customer revenue.
See analysts’ growth forecasts and price targets for Alibaba stock (It’s free!) >>>
What the Market Is Telling Us About BABA Stock
The market’s positive reaction to BABA stock reflects validation of Alibaba’s strategic pivot toward becoming a dominant AI infrastructure provider in China.
While Alibaba doesn’t sell chips directly, companies can access the computing power through Alibaba’s cloud services, creating a recurring revenue model that leverages the company’s semiconductor investments.
This partnership with China Unicom demonstrates tangible progress in Alibaba’s ambitious three-year plan to invest RMB 380 billion ($52 billion) in cloud and AI infrastructure.
Alibaba has already invested over $14 billion in AI infrastructure and R&D over the past four quarters, with this quarter’s CapEx reaching $5.4 billion.
The deal positions Alibaba as a key beneficiary of China’s semiconductor self-sufficiency drive at a time when geopolitical tensions continue to restrict access to advanced foreign chips.
With China Unicom joining a data center project that includes other domestic chip firms, such as MetaX and Biren Technology, Alibaba’s selection validates its competitive position in China’s emerging AI chip ecosystem.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
