TLDR
- Alibaba shares surged more than 4% in Hong Kong trading after reports revealed the company is building “Plan C,” a conversational AI project aimed at competing with ByteDance’s Doubao chatbot.
- The Quark unit is leading Plan C development with assistance from Tongyi Labs, Alibaba’s core AI research division responsible for creating the Qwen large language models.
- Trading near $166, Alibaba stock has gained 85-97% year-to-date in 2025, approaching four-year highs and outperforming major market indices by a wide margin.
- Alibaba committed $53 billion over three years to AI and cloud infrastructure, unveiling a 1-trillion-parameter model and forming NVIDIA partnerships at its recent Apsara conference.
- Cloud revenue jumped 26% last quarter versus 10% e-commerce growth, as AI computing demand surges across China and drives Alibaba’s business transformation.
Alibaba stock climbed over 4% in Hong Kong on Tuesday following reports that the e-commerce giant is developing a new artificial intelligence initiative. Shares reached HK$169.0 and contributed heavily to the Hang Seng index’s 1.7% advance.
Alibaba Group Holding Limited, BABA
Chinese media outlet Sina Tech reported that Alibaba’s Quark division is creating “Plan C,” an AI project focused on conversational technology. The initiative appears designed to compete directly with ByteDance’s widely-used Doubao chatbot platform.
Quark’s core development team is building Plan C with support from Tongyi Labs. This division operates as Alibaba’s central AI research hub and has produced all iterations of the company’s Qwen large language models.
Tongyi Labs competes directly with ByteDance in China’s rapidly expanding AI sector. ByteDance has established itself as one of the nation’s leading AI developers through its Doubao platform.
The AI project news arrives as Alibaba stock trades around $166 on the New York Stock Exchange. Current prices represent the highest levels seen in nearly four years.
Year-to-date gains range between 85% and 97%. This performance makes Alibaba one of 2025’s standout tech recovery plays, crushing broader market returns by substantial margins.
Cloud Business Powers Revenue Growth
CEO Eddie Wu has pushed Alibaba deep into artificial intelligence and cloud computing. The company announced plans to invest 380 billion yuan (approximately $53 billion) over three years in AI development and cloud infrastructure expansion.
Alibaba showcased Qwen-3 Max at its September Apsara technology conference. The 1-trillion-parameter AI model delivers capabilities comparable to the world’s most advanced AI systems.
The company also introduced Qwen-3 Omni for vision and augmented reality applications. NVIDIA partnerships were announced to jointly develop AI chips and software solutions.
These AI reveals sparked an 8% single-day stock gain. Investor enthusiasm centers on Alibaba’s positioning as a major AI player.
Real results are showing in the cloud division. Cloud revenue increased 26% year-over-year in the June quarter, dramatically outpacing the 10% growth rate in core e-commerce operations.
AI computing services demand has exploded throughout China. Alibaba Cloud supplies infrastructure for numerous companies training large language models and generative AI systems.
Strong cloud performance helped push total quarterly revenue up 14% to 247.7 billion yuan. JPMorgan raised its 12-month Alibaba price target by nearly 45% in early October, pointing to “growth inflection” from AI and cloud efforts.
Investment spending has pressured margins in the near term. Operating income declined 3% last quarter while adjusted EBITDA fell 14% year-over-year despite revenue expansion.
CFO Toby Xu noted that “profitability was impacted by growth initiatives” including user acquisition and technology research spending. The company maintains financial strength with over $20 billion in annual net income and $23 billion in net cash reserves.
Analyst Community Remains Bullish
Wall Street maintains overwhelmingly positive sentiment on Alibaba stock. Current analyst ratings show 17 Buy recommendations versus just one Hold rating and zero Sell ratings.
Consensus 12-month price targets cluster around $184. Top-tier analysts project substantially higher upside if execution continues smoothly.
JPMorgan forecasts shares could hit $240 by late 2026. Jefferies maintains a $230 target based on spin-off potential and Chinese economic recovery prospects.
CLSA upgraded its target from $155 to $200 recently. Goldman Sachs named Alibaba a top pick among Chinese companies pursuing global expansion strategies.
Revenue growth is expected to accelerate into the high-teens percentage range. Analyst consensus projects 15-20% annual earnings per share growth over coming years.
China’s regulatory stance has improved dramatically in 2025. Authorities shifted toward supporting tech sector growth after the 2020-2022 crackdown period that included a $2.8 billion antitrust fine for Alibaba.
Geopolitical factors remain a consideration. U.S.-China tensions around semiconductor export controls and tariff threats have created periodic volatility, though buying interest has emerged consistently on price dips.
Alibaba’s market capitalization currently stands near $430 billion. The company’s next quarterly earnings release is scheduled for November.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
