Alibaba (BABA) is back in the game

I’m looking at Alibaba right now because the stock just ripped to a four-year high after announcing a major AI push. The market reaction - almost +10% in a single day - caught my attention, and I wanted to dig into whether this is hype or a real shift in the company’s story.

Technical View

From a technical view, the chart looks strong. BABA broke through resistance levels that had capped it since early 2025, with volume confirming the move. There’s room toward the $190-200 zone if momentum continues.

Options data shows more bullish positioning too, though short interest on the ADRs just hit a five-year high, which could mean some traders are betting against this rally.

Fundamentals

The news is hard to ignore. Alibaba unveiled its Qwen3-Max model, claiming over a trillion parameters and ranking in the top three globally. 

On top of that, it struck a partnership with Nvidia for AI infrastructure and announced new data centers across Brazil, France, the Netherlands, and more. Management already committed $53B in AI infrastructure spending earlier this year, and now they’re expanding even further. That’s a clear signal this isn’t a side bet - they’re trying to compete head-on with the U.S. hyperscalers.

Macro / Policy Angle

A key factor here is the broader macro and policy environment. Beijing seems to have shifted from cracking down on Alibaba to embracing it as a national AI champion. The government’s push for an “intelligent economy” by 2035 means demand and subsidies will likely support this move. That’s a big change from the uncertainty we saw in 2021-2022. The only real cap here is chip access - China doesn’t have the same pipeline of advanced semis as the U.S. - but Alibaba’s global data center buildout could help balance that risk.

My take

I’m bullish here. The breakout on the chart, the scale of the AI commitment, and the political tailwinds in China make this more than just a headline pump. Valuation still looks reasonable compared to Amazon or Microsoft, and if Alibaba succeeds in pivoting to AI/cloud leadership, the rerating potential is significant.