Alibaba-W (09988) saw its share price climb more than 4% during Thursday's trading session, with gains reaching 4.17% to hit HK$127.30 by midday, accompanied by turnover of HK$9.795 billion. The surge comes as investors position themselves ahead of the company's fiscal first-quarter results, scheduled for release this Thursday, August 20, covering the three months ending June 30, 2026.
The e-commerce giant has been making frequent moves in the artificial intelligence space recently. On August 3, the company unveiled its next-generation flagship model, Qwen3.8-Max, and simultaneously launched the public beta of its enterprise-grade agent product, Qianwen Office. Following the earlier release of "Happy Horse," Alibaba introduced its AI music model, HappyShrimp, today, underscoring its aggressive push into AI-driven offerings.
Where to begin with the investment thesis? According to Galaxy Securities, the acceleration of AI and cloud business growth, coupled with a clear path toward substantial losses reduction in instant retail, signals a turning point in fundamentals. Additionally, the company stands to benefit from significant investment gains as portfolio companies go public, as well as a potential AI partnership involving the domestic version of Apple's iPhone, which together position Alibaba's full-stack AI assets for a valuation re-rating.
China Merchants Securities echoes this optimism, noting that as domestic and international cloud vendors demonstrate growth elasticity and return-on-investment pathways become increasingly transparent, value in the AI industry chain is shifting toward cloud service providers. As the largest cloud vendor in China, Alibaba Cloud's comprehensive AI architecture creates a competitive moat, with the new Qwen3.8-Max model marking a substantial leap in capability. The brokerage reaffirms a strong buy recommendation, expressing confidence in Alibaba Cloud's solid competitive position, growth potential, and profit headroom.
On the online consumer front, competition in China's e-commerce market has moderated this year, and the food delivery subsidy war has cooled down. China Merchants Securities sees this easing environment as favorable for Alibaba's China e-commerce division, which should maintain steady growth momentum moving forward.