Is Alibaba The One Who Can Take On Big Tech?
Alibaba $BABA-W(09988)$
Alibaba's Quark AI Glasses
Alibaba's move into AI wearables is more than just a gadget launch. It is a strategic signal Alibaba is ready to take on competition in the AI race.
The Quark AI Glasses come in 2 variants :
The G1 at 1899 yuan (USD 268) and the S1 at 3799 yuan (USD 537), both integrated with Alibaba's proprietary Qwen AI model and Qwen App. These glasses offer features like real time translation, AI generated meeting notes, instant price recognition via Taobao and hands free navigation. This positions Alibaba as a direct challenger to Meta's USD 799 Ray-Ban Smart glasses.
Is Alibaba A Buy?
From an investment lens, Alibaba remains cheaper than US Tech peers on a P/E basis, reflecting investors' concern about regulatory risks and slower growth in its core e-commerce business. For example Alibaba's P/E ratio is 21.40 compared to Meta's P/E ratio of 28.00.
Recent analysts rating indicate a consensus of Moderate Buy or Strong Buy. Alibaba's 12 month price target is around USD 190 to USD 197, representing a potential 20% to 25% upside.
This is based on positive views regarding Alibaba's valuation, AI strategy and strong cloud performance. However Alibaba faces headwinds from intense competition and a slower consumer spending environment in China.
Is Alibaba the One Who Can Take On Big Tech?
In the AI sector, Alibaba is positioning itself as a dominant player in China. Its Cloud Division Alicloud, holds a significant market share in China's AI cloud services.
AI pivot : In February 2025, Alibaba announced that it would invest at least 380 billion yuan (USD 53 billion) over 3 years into AI and cloud infrastructure.
Key Elements of Alibaba's AI Pivot :
Massive Investment : The USD 53 billion investment plan is to be allocated towards expanding data centers, developing proprietary chips and enhancing AI models.
Full Stack AI Strategy : Alibaba's vision is to control every layer of the AI value chain. This includes proprietary chips via its T-Head Division to cloud infrastructure (Alicloud) and its own foundational AI models (Qwen).
Ecosystem Integration : Alibaba is embedding AI across its vast ecosystem, from ECommerce (Taobao) to logistics (Cainiao) and enterprise services. Alibaba is also using its Qwen AI models in consumer products such as its recently launched AI Glasses.
AI as a New Operating System: CEO Eddie Wu has framed AI as the new operating system for Alibaba and its Qwen models as the "Android of the AI era", designed to be open and extensive for a wide developer ecosystem.
Strategic Partnership: Alibaba Cloud has been chosen by Apple $Apple(AAPL)$
Shift in Focus : The AI pivot marks a strategic shift away from Alibaba's traditional online shopping focus towards the higher growth, high tech space of AI, Cloud and Fintech.
Concluding Thoughts
The path forward for Alibaba is not without challenges. The headwinds are real and the competition is intense. Yet in a market often swayed by fear, Alibaba is choosing a different route : innovation and the courage to take action.
As Alibaba forges ahead with its AI driven strategy, this is an unfolding story of resilience, innovation and a determination to prove that the brightest chapters are yet to be written. The battle for an AI future has just begun and Alibaba is ready.
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Modify on 2025-12-02 14:45
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