- Alibaba Group Holding Limited has already reported its third-quarter and nine-month results to December 31, 2025, showing modest sales growth but a sharp drop in net income and earnings per share versus the prior year.
- At the same time, Alibaba is preparing to adopt Huawei's new 950PR AI processor as US restrictions on Nvidia hardware push it toward domestically produced chips for its cloud and data center infrastructure.
- We’ll now examine how Alibaba’s shift toward Huawei’s 950PR AI chips may influence its AI-cloud investment narrative and future positioning.
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Alibaba Group Holding Investment Narrative Recap
To own Alibaba today, you need to believe its heavy AI and cloud spending can eventually support healthier earnings after a year of weaker profitability and modest sales growth. The move toward Huawei’s 950PR AI chips may influence how efficiently Alibaba can scale AI-cloud capacity in the near term, but the more pressing short term catalyst remains whether margins can stabilize after the sharp drop in net income, with execution risk on large AI and quick commerce outlays still front and center.
The latest quarterly results put this into sharper focus: for the three months to December 31, 2025, sales edged up to CNY 284,843 million, while net income fell to CNY 16,383 million from CNY 49,127 million a year earlier. That contrast between modest top line progress and significantly lower earnings frames how investors might assess any benefits or cost implications from adopting Huawei’s 950PR chips within Alibaba’s already sizable AI and cloud investment plans.
However, investors should also be aware that if Alibaba’s multi year AI infrastructure build out fails to match actual AI demand and monetization, then ...
Read the full narrative on Alibaba Group Holding (it's free!)
Alibaba Group Holding's narrative projects CN¥1352.3 billion revenue and CN¥157.6 billion earnings by 2029. This requires 10.0% yearly revenue growth and a CN¥64.8 billion earnings increase from CN¥92.8 billion today.
Uncover how Alibaba Group Holding's forecasts yield a $189.58 fair value, a 55% upside to its current price.
Exploring Other Perspectives
Some of the most optimistic analysts were previously assuming Alibaba could lift annual revenue to about CNY 1,455.7 billion and earnings to roughly CNY 219.7 billion, which paints a far rosier picture than the risk that AI capex proves excessive if demand underwhelms; after the Huawei 950PR news, these bullish assumptions may be revisited, so it is worth comparing these different views before deciding how you see the stock.
Explore 62 other fair value estimates on Alibaba Group Holding - why the stock might be worth over 2x more than the current price!
Form Your Own Verdict
Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.
- A great starting point for your Alibaba Group Holding research is our analysis highlighting 3 key rewards that could impact your investment decision.
- Our free Alibaba Group Holding research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Alibaba Group Holding's overall financial health at a glance.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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