Market predictions for Alibaba's valuation over the past decade have been anchored in the growth of its e-commerce business. The regulatory crackdown on tech giants by Chinese authorities, coupled with the sluggish consumption in the post pandemic, has dampened investors' interest and enthusiasm around Alibaba.
However, Alibaba's partnership with Apple is changing its underlying valuation logic significantly. AI technology hopefully will be the important engine for Alibaba's growth for the foreseeable future.
Many hedge fund and long-term fund investors optimisticly believe that AI may be a strong turning point for Alibaba, and the AI narrative will be seen as a potential factor driving Alibaba's valuation up down the road.
In fact, Alibaba's layout in the field of AI models began as early as two years ago. In March 2023, Alibaba, which was hit hard by official crackdown and sluggish consumption, launched the "1+6+N" organizational reform, significantly divesting edge assets while increasing investment in cloud computing and e-commerce businesses.
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