On Wednesday, Alibaba Group Holding Limited (NYSE:BABA) said its artificial intelligence business has moved beyond early investment and entered “full-scale commercialization,” as the company positions AI and cloud computing as key future growth drivers.
AI Business Enters ‘Full-Scale Commercialization’
A South China Morning Post report on Wednesday said Chairman Joe Tsai and CEO Eddie Wu Yongming expect demand for full-stack AI services to grow rapidly, driven by increasing adoption of AI agents and automated workflows.
Alibaba reported cloud revenue rose 38% year over year to 41.6 billion yuan in the March quarter, while AI-related product revenue reached 8.97 billion yuan after 11 consecutive quarters of triple-digit growth. AI products accounted for 30% of cloud revenue.
The company expects annualized recurring revenue from AI models and applications to reach 30 billion yuan by year-end, with AI products projected to contribute more than half of cloud-computing revenue within the next year.
Technical Analysis
From a trend perspective, BABA is still trading 7% below its 20-day SMA, 4.5% below its 50-day SMA, 12.6% below its 100-day SMA, and 15.8% below its 200-day SMA—so rallies are still running into overhead supply where longer-term holders may look to sell into strength.
The 20-day SMA sitting above the 50-day SMA is a near-term constructive sign, but it hasn’t been enough to flip the bigger picture while the 50-day remains below the 200-day (the death cross that printed in April).
Momentum looks more “range-bound than trending” right now, with RSI at 45.65, which signals neither an overbought squeeze nor an oversold washout is in control.
In plain English, RSI helps gauge whether recent buying or selling has become stretched; here it suggests sellers have the edge, but not with the kind of extreme momentum that often marks a durable low.
Key levels are getting clearer as price compresses between overhead trend resistance and a nearby demand zone:
- Key Resistance: $144.00 — a round-number area that also lines up closely with the 100-day SMA/longer-term trend pressure where rebounds can stall
- Key Support: $118.00 — a nearby floor that sits above the $103.71 52-week low zone, making it a key “must-hold” area for bulls trying to build a base
Alibaba Analyst Outlook
Analyst Consensus & Recent Actions: The stock carries a Buy rating with an average price forecast of $194.60 (19 analysts). Recent analyst moves include:
- Susquehanna: Positive (Raises forecast to $185.00) (May 15)
- JP Morgan: Overweight (Raises forecast to $205.00) (May 14)
- Barclays: Overweight (Raises forecast to $195.00) (May 14)
Price Action
BABA Price Action: Alibaba shares were down 4.56% at $125.47 during premarket trading on Friday, according to Benzinga Pro data.
Image via Shutterstock
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