• Earlier this month, Alibaba Group Holding announced the launch of its most advanced multimodal AI models, including Qwen3-Max and Qwen3-Omni, alongside a plan to significantly accelerate investment in AI and cloud infrastructure to strengthen its global position.

• This move underscores Alibaba’s emphasis on open-source leadership and large-scale AI adoption, signaling a shift toward broadening global enterprise reach and technology innovation.

• We’ll examine how Alibaba’s release of open-source AI models and increased infrastructure investment could reshape its long-term investment narrative.

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To be a shareholder of Alibaba today, you need to believe the company’s heavy investment in AI and cloud can power significant long-term growth, offsetting near-term pressures on profitability. The recently completed US$3.168 billion zero-coupon convertible bond offering bolsters Alibaba’s financial flexibility, but does not materially change the core catalysts or main risk: that high spending on technology and infrastructure could keep margins compressed if growth targets are not met.

Among Alibaba’s recent announcements, the unveiling of the Qwen3-Max trillion-parameter AI model stands out as particularly relevant, demonstrating Alibaba’s continued commitment to global AI leadership and cloud service innovation, both key to unlocking the next phase of growth, especially as enterprise adoption accelerates and competition heats up. However, such large-scale rollouts also reinforce the importance of execution and returns on recent investments.

By contrast, investors should be aware that Alibaba’s pace of investment has pushed free cash flow into negative territory recently, raising questions about …

Read the full narrative on Alibaba Group Holding (it’s free!)

Alibaba Group Holding’s outlook anticipates CN¥1,260.3 billion in revenue and CN¥171.1 billion in earnings by 2028. This scenario is based on 8.0% annual revenue growth and a CN¥22.8 billion increase in earnings from the current CN¥148.3 billion.

Uncover how Alibaba Group Holding’s forecasts yield a $165.48 fair value, in line with its current price.

Fair value estimates from 78 members of the Simply Wall St Community span from US$106.47 to US$785.21, underscoring wide variance in shareholder outlooks. While this diversity reflects many ways to forecast Alibaba’s earnings potential, the risk of prolonged profit compression from aggressive AI and cloud investments remains front of mind as you weigh these diverse opinions.