Alibaba Shares Surge as AI Enthusiasm Reignites Investor Confidence

A wave of optimism has returned to China's technology sector at the start of the year. Alibaba's stock posted significant gains on Friday, fueled by competitive developments in public listings and a persistent narrative around artificial intelligence. Market participants are betting that the e-commerce and cloud computing behemoth is positioned to capture outsized benefits from China's next wave of AI innovation, serving as a primary infrastructure provider.

Beyond the positive market sentiment, Alibaba's operational performance provides concrete reasons for investor interest. The company is deeply embedded in constructing the foundational layers for AI development. Its cloud division reported a 34% year-over-year revenue increase for the September quarter, with income from AI-related cloud services achieving triple-digit growth for eight consecutive quarters.

From a valuation perspective, analysts see potential. Trading at an estimated price-to-earnings (P/E) ratio of approximately 20, Alibaba shares are valued at a notable discount compared to U.S. rival Amazon, which commands a P/E of 32. The majority of Wall Street analysts maintain a bullish outlook, with consensus price targets sitting well above the current trading level.

Chip Sector Developments Spark Broad Rally

The shift in market mood was primarily triggered by news from Alibaba's competitive landscape. Rival Baidu announced plans to list its AI chip unit, Kunlunxin, on the Hong Kong exchange. This move highlights China's accelerated push to develop independent semiconductor alternatives—a direct response to ongoing U.S. export restrictions.

Should investors sell immediately? Or is it worth buying Alibaba?

This sentiment was further amplified by the successful market debut of Shanghai Biren Technology, another AI chip designer. Its stock price skyrocketed nearly 120% on its first trading day. These events catalyzed a broad-based buying spree across Chinese tech stocks, as investors recognized the substantial capital flowing into domestic AI infrastructure.

Consolidating Influence Through Investments and Innovation

Alibaba is further cementing its strategic role through strategic investments. Reports indicate the company is acting as a key investor in the anticipated initial public offering of AI startup MiniMax. Furthermore, with its proprietary "Qwen" models now surpassing 600 million downloads, Alibaba provides the world's most widely used open-source AI models.

Technical and Fundamental Outlook

The recent share price advance to $155.74 represents a counter-trend move following a noticeable correction. The stock had previously retreated roughly 20% from its October peak. Despite Friday's jump, the Relative Strength Index (RSI) reading of 29.4 continues to signal a technically oversold condition, which chart-focused investors may interpret as a potential entry signal.

The next significant catalyst is anticipated on February 19, 2026, when Alibaba releases its earnings. This report will clarify whether the company can meet high expectations in its cloud segment and if the technical recovery possesses enough momentum to once again target the resistance zone around $192.