Alibaba Stock Rallies 12.55% in 3 Days on AI Cloud Growth, Qwen Adoption

Alibaba Group Holding Ltd.’s shares rose to their highest level so far this month, reaching an intraday gain of 3.47% on Jan. 15. The stock has climbed 12.55% over the past three trading days, marking a resurgence in investor confidence after a period of volatility.

The rally reflects growing optimism around Alibaba’s AI-driven growth initiatives and its expanding cloud infrastructure. The company’s Qwen large-language model has driven 700 million downloads, reinforcing its leadership in open-source AI.

Alibaba Cloud’s 35.8% share of China’s AI cloud market in the first half of 2025, coupled with RMB22.3 billion in revenue, underscores its dominance in a sector projected to grow 149% year-over-year in 2025. Analysts highlight the integration of Qwen into platforms like Taobao and Alipay as a key catalyst for user engagement and monetization.

However, challenges remain. Heavy investments in AI, cloud, and quick-commerce are straining cash flow, raising concerns about long-term sustainability. Regulatory uncertainties and recent analyst downgrades, including a “neutral” rating from Arete with a $172 price target, reflect divergent views on execution risks. Despite these headwinds, institutional ownership has edged higher, with entities such as Summa Corp. increasing stakes. Jefferies and Macquarie maintain “buy” or “outperform” ratings, though price targets have been adjusted downward, signaling cautious optimism about Alibaba’s ability to capture a significant share of China’s expanding AI market.