{"id":3427,"date":"2026-04-19T12:49:56","date_gmt":"2026-04-19T12:49:56","guid":{"rendered":"https:\/\/finzexpert.com\/blog\/baba-makes-ai-investments-stock-analysts-want-to-see\/"},"modified":"2026-04-19T12:49:56","modified_gmt":"2026-04-19T12:49:56","slug":"baba-makes-ai-investments-stock-analysts-want-to-see","status":"publish","type":"post","link":"https:\/\/finzexpert.com\/blog\/baba-makes-ai-investments-stock-analysts-want-to-see\/","title":{"rendered":"BABA makes AI investments stock analysts want to see"},"content":{"rendered":"\n<div>\n<div data-test=\"articleBody-2\" data-analytics=\"RegularArticle-articleBody-5-2\">\n<p><span hidden=\"\" aria-hidden=\"true\" class=\"ArticleBody-extraData\"><span hidden=\"\" aria-hidden=\"true\" class=\"ArticleBody-extraData\"><span hidden=\"\" aria-hidden=\"true\" class=\"xyz-data\">Alibaba shares have accelerated their gains this month as the Chinese e-commerce giant has released a succession of new artificial intelligence models. &#8220;Alibaba&#8217;s approach of having a large range of AI models [is] a smart strategic play that sets it apart from other players and designed for efficiency,&#8221; said Brian Tycangco, an analyst at Stansberry Research. &#8220;A single large model that carries enormous features may not be practical for AI markets that don&#8217;t require complex search and compute,&#8221; he said. &#8220;This makes it too expensive for a good portion of the addressable market that needs an AI model for basic tasks.&#8221; Alibaba&#8217;s Hong Kong-listed shares have climbed more than 14% in April, putting them on pace for their best month since January \u2014 when they rose by more than 18%. The U.S.-traded shares are also tracking for their best month since January. &#8220;BABA appears to be accelerating its AI investments; We believe the stepped-up investments are necessary in its race to reach and maintain dominance in AI,&#8221; Bernstein analysts said in an April 13 report, reiterating an overweight rating. They have a $186 price target on Alibaba&#8217;s U.S.-listed shares. Bernstein analysts estimate Alibaba&#8217;s AI investments in the March quarter nearly doubled from the prior quarter to around 20 billion yuan ($2.93 billion). &#8220;BABA management recently guided to reach $100bn in annual revenues from AI and cloud in the next five years. If that goal can be achieved, the current investments appear to be more than justified.&#8221; They didn&#8217;t appreciate Alibaba spending on free milk tea in a marketing campaign for its AI app Qwen . But they were optimistic that the company&#8217;s cloud business would benefit from its ability to raise fees. In contrast to free-to-use chatbots, tools such as the OpenClaw AI agent or video generation have increased locals&#8217; incentive to pay for AI capabilities. Alibaba&#8217;s latest AI model, announced Thursday, is a model called Happy Oyster that can create the 3D environments used in gaming. It&#8217;s a so-called world model that analysts say can replicate the real, physical world better than existing chatbot models. Days earlier, Alibaba confirmed its navigation unit is developing a four-legged robot. The company in February released an AI model targeted at training robots . The company earlier this month also revealed it is behind an AI video generation model HappyHorse that has surpassed ByteDance&#8217;s viral Seedance 2.0 in non-audio video generation capabilities, according to rankings by Artificial Analysis. &#8220;We believe the successful development and release of the HappyHorse-1.0 video model will likely be viewed as an important achievement for\u00a0Alibaba&#8217;s model stack, as video generation expertise in China was previously dominated by ByteDance and Kuaishou,&#8221; Citi analysts said in an April 10 report. They have a price target of $205 on Alibaba&#8217;s U.S.-listed shares, which they rate buy. &#8220;Since video models require substantially more tokens than text-based models, we believe the growing popularity of the HappyHorse model could translate to higher token monetization and greater cloud revenue opportunities,&#8221; the Citi analysts said. &#8220;That said, the potential success of HappyHorse also suggests that Kuaishou &#8216;s Kling will face intensified competition in the video model landscape.&#8221; Kuaishou&#8217;s Hong Kong-traded shares have struggled to turn around after nearly halving in price since a high in January. Happy Horse&#8217;s release could also &#8220;broaden enterprise AI opportunities&#8221; for Alibaba, Bank of America analysts said in an April 10 report. They called the company &#8220;one of the most compelling AI plays in China .&#8221; BofA rates Alibaba a buy, with a price target of $172, for upside of 19% from Thursday&#8217;s close. Privately held ByteDance has in recent months increasingly been seen as an all-around leader in AI in China, with its popular Doubao chatbot, Seedance video generation tool and cloud computing services. The company&#8217;s valuation has reportedly surged above $600 billion , doubling in less than a year. In contrast, Alibaba&#8217;s shares are trading near where they were 12 months ago. The company has also invested widely in startups , such as leading a $290 million investment round earlier this month to back a Chinese startup that is building its own a world model. Back in March, JPMorgan analysts said that based on an Alibaba investor meeting, the company&#8217;s &#8220;strategic ambition is becoming easier to understand.&#8221; &#8220;Alibaba management does not want investors to value cloud as a traditional infrastructure business alone, but as a broader AI stack with growing monetization potential through model services, token consumption and application-layer usage,&#8221; the JPMorgan analysts said. &#8220;That is a constructive framing for the medium term, because it expands the set of value drivers investors should focus on.&#8221; \u2014 CNBC&#8217;s Michael Bloom contributed to this report.<\/span><\/span><\/span><span class=\"HighlightShare-hidden\" style=\"top:0;left:0\"\/><\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Alibaba shares have accelerated their gains this month as the Chinese e-commerce giant has released a succession of new artificial intelligence models. &#8220;Alibaba&#8217;s approach of having a large range of AI models [is] a smart strategic play that sets it apart from other players and designed for efficiency,&#8221; said Brian Tycangco, an analyst at Stansberry [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":3428,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[561,3030,2510,563],"class_list":["post-3427","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-loan","tag-analysts","tag-baba","tag-investments","tag-stock"],"_links":{"self":[{"href":"https:\/\/finzexpert.com\/blog\/wp-json\/wp\/v2\/posts\/3427","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finzexpert.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finzexpert.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finzexpert.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finzexpert.com\/blog\/wp-json\/wp\/v2\/comments?post=3427"}],"version-history":[{"count":0,"href":"https:\/\/finzexpert.com\/blog\/wp-json\/wp\/v2\/posts\/3427\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finzexpert.com\/blog\/wp-json\/wp\/v2\/media\/3428"}],"wp:attachment":[{"href":"https:\/\/finzexpert.com\/blog\/wp-json\/wp\/v2\/media?parent=3427"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finzexpert.com\/blog\/wp-json\/wp\/v2\/categories?post=3427"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finzexpert.com\/blog\/wp-json\/wp\/v2\/tags?post=3427"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}