Alibaba’s share price has surged more than 75% year-to-date, marking its strongest annual performance since 2014. While this rally underscores renewed investor confidence in the company’s pivot to artificial intelligence, history cautions that the last time Alibaba saw such gains, its stock fell more than 40% over the following 12 months. Investors should monitor volatility indicators and liquidity flows closely, as extreme short-term strength can presage sharp reversals in China’s e-commerce sector.

Alibaba’s cloud intelligence division recorded 34% revenue growth in the latest quarter, outpacing the 15% expansion of its overall continuing operations. AI-related product sales have delivered triple-digit year-over-year growth for nine consecutive quarters, contributing meaningfully to the segment’s robust profitability. In the last fiscal year, cloud intelligence generated an adjusted EBITDA margin above 30%, reinforcing the division as one of Alibaba’s few profitable units outside its core marketplaces.

Leveraging strong cash flow from Taobao and Tmall—which together accounted for 45% of consolidated revenue and more than 100% of adjusted EBITDA in fiscal 2025—Alibaba has invested over $17 billion in AI and cloud infrastructure over the past 12 months. This self-funded approach has enabled the group to pursue aggressive R&D spending without issuing new shares or taking on significant debt, preserving shareholder value while positioning the company for leadership in China’s strategic AI chip development programs.

Alibaba anchored approximately $350 million of the planned Hong Kong IPO for Chinese AI startup MiniMax, which seeks to raise at least HKD 3.83 billion at a valuation near HKD 51 billion. As a cornerstone investor alongside global sovereign wealth funds, Alibaba gains preferential access to MiniMax’s next-generation large language models. This investment not only diversifies Alibaba’s AI portfolio beyond its in-house offerings but also strengthens its foothold in the domestic AI ecosystem, where competition with rivals such as Zhipu AI is intensifying.