Alibaba is the cleanest public-market bet that Chinese AI labs are innovating rather than just distilling, and that cheaper models drive more usage. If China is innovating, Qwen drives Alibaba Cloud share; if Jevons paradox holds, Alibaba captures the spend across models, compute, data, chips and apps. AI products are already 30% of Alibaba Cloud's external revenue, above a $5B run rate, and the commerce cash engine can carry it through the capex/revenue mismatch. x.com 

Alibaba offers opportunity at $123 as a front-runner in China's AI buildout, particularly if its AI spending shows real returns and it proves it can compete with the US. Over $56 billion of AI and cloud investment over three years has made current free cash flow negative, like US hyperscalers. Cloud growth is expected near 45%, AI products are already 30% of external cloud revenue, and it holds $38 billion of net cash. Cloud growth, capex and guidance will drive the earnings reaction. x.com 

Alibaba is no longer worth owning when better opportunities exist. The case for it as a China hedge was a macro feeling applied to a single company, and it ignored Jack Ma being yanked away and a lack of cloud growth while leaning on share buybacks and looking too cheap to ignore. Despite its discount to US companies, other stocks, such as GitLab and Airbnb, now look much more compelling. x.com 

Alibaba's market cap is only about 10x the next 12 months' sales of its cloud business, so the e-commerce behemoth comes for free. The cloud business now has a $24 billion revenue run rate, growing 38% year over year and still accelerating, and it is early days in China. A post the author replies to counters that Alibaba Cloud's margins are only 3-5% versus AWS's 30%, but Google Cloud's margins three to four years ago versus today show how that can change. x.com  x.com 

Alibaba remains undervalued because its accelerating cloud business can carry the stock while other segments lag. Cloud revenue growth sped up to 45%, a strong acceleration on a higher base, and AI revenue posted a 12th straight quarter of triple-digit growth. Total revenue rose only 9%, margins were very low and China commerce keeps disappointing. Modeling $100B of cloud revenue in five years, fair value is $182 and the one-year target is $203, with a lower exit multiple reflecting China risk. … Show more

Alibaba is tough to hold because it is splitting investment between e-commerce and AI, creating massive execution risk. AI is so capex-hungry that, as Western examples show, Alibaba cannot spread spending and still reach comparable results. The market sees China e-commerce spending, including the quick-commerce race, as having no ROI, and is right. Replies argue Alibaba has no choice; it might still make it, but the risk is that its AI push slows. x.com  x.com  x.com 

Alibaba should be taken seriously within the next three months, trading at just 10 times 2028 earnings. x.com  x.com 

Alibaba at $110 is one of the most mispriced mega-caps because investors effectively get its AI and cloud business for free. The company is worth about $270B and holds around $70B in cash and liquid investments, while core e-commerce generated almost $5.9B of adjusted EBITA in one quarter, roughly $230B annualized at just 10x. AI and cloud may be Alibaba's most valuable part five years from now. x.com 

Alibaba's full AI stack is not yet working economically: it loses $4 for every $1 of revenue, and that is the whole thesis risk. AI Labs lost RMB13.9B, cloud profit covers only 41% of that hole, and commerce is still funding the entire AI build. The cloud business works; the full AI stack does not yet. x.com 

Alibaba and Baidu stand to benefit because China will not slow its AI development even if the US slows its own. x.com