Is Alibaba the Best Chinese AI Play After Apple’s Endorsement?
This analysis from Yahoo Finance examines Alibaba's position as a leading Chinese AI investment following Apple's partnership endorsement. Alibaba plans to invest over $53 billion in AI and cloud infrastructure by 2028. On July 15, 2026, Apple secured regulatory approval to launch Apple Intelligence in China, powered by Alibaba's Qwen large language model for text generation, image understanding, and conversational AI. This partnership is expected to boost Alibaba's reputation and drive adoption of its cloud AI services. Alibaba's fiscal Q4 2026 results show cloud revenue up 38%, with AI products contributing 30% of external cloud revenue. The company generates $11.1 billion in annual free cash flow, supporting its AI expansion. Trading at 14-18x forward earnings and a 2x price-to-sales ratio, Alibaba is considered undervalued compared to Amazon. Risks include China's uneven economic recovery, competition from Tencent, Baidu, DeepSeek, and Huawei, and potential regulatory changes. Hedge fund holdings decreased from 115 to 102 funds in Q1 2026, but major holders like Fisher Asset Management and Appaloosa Management remain significant.
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