Alibaba Group Holding Ltd. introduced its next-generation artificial intelligence processor, the Zhenwu V900, at its Apsara Conference in Hangzhou, sending its Hong Kong-listed shares up roughly 3% on Tuesday. The stock reached $118.5, its highest level since August 21 and about 13.45% above its September low.
The new chip is designed to deliver three times the performance of the Zhenwu M890, which was released in May. Alibaba said the V900 will enter full production in the first quarter of next year. The company also outlined plans to expand Alibaba Cloud's global data center capacity to more than 20 gigawatts by 2032, a move aimed at capturing a larger share of the AI infrastructure market.
AI momentum builds
Alibaba has become a major force in the AI sector. Its Qwen family of models has accumulated over 3 billion downloads in recent months, surpassing download counts for models from Meta Platforms and X. The Qwen 3.8 Max model features a context window approaching 1 million tokens, with an average cost per token of $5.41, undercutting pricing from Anthropic.
In its most recent quarter, Alibaba reported revenue growth of 9% to $39.63 billion. The AI Cloud and Compute Services segment generated $7.13 billion, supported by rising adoption of its AI solutions. The company holds close to a 40% share of China's cloud market.
Competitive and financial pressures
Despite the AI progress, Alibaba faces intensifying competition in China from rivals such as MiniMax, DeepSeek, and Moonshot, which are gaining market share. Its core e-commerce business has also slowed, with the e-commerce group posting $16.3 billion in quarterly revenue, down 8% year over year.
To fund its AI ambitions, Alibaba recently announced a plan to raise $10 billion through a share sale, a move that will dilute existing shareholders. The stock remains down about 35% from its 2025 high, reflecting concerns about e-commerce growth and heavy spending.
Analyst sentiment and technical setup
Several Wall Street firms have turned more bullish. Bernstein, Susquehanna, Barclays, and JPMorgan all raised their outlooks on BABA, pointing to the company's AI growth trajectory.
On the technical front, Alibaba's chart has formed an inverted head-and-shoulders pattern, a structure often associated with a bullish reversal. The stock has moved above its 50-day moving average, and the Relative Strength Index has climbed above the neutral 50 level. Some analysts see a potential breakout toward $150 in the near term.
This article is for informational purposes only and does not constitute financial advice.
