Analyst on Alibaba’s (BABA) AI Race With US Companies: ‘It’s Going to be Tough For Them’

Core Viewpoint - Alibaba Group Holding Limited (NYSE:BABA) is gaining attention from Wall Street analysts, particularly due to its recent announcement to increase AI spending by $53 billion, which has positively impacted its stock price [1][2] Group 1: AI Investment and Market Position - The announcement of a $53 billion investment in AI has generated excitement, indicating Alibaba's intent to compete in the AI sector, although it faces significant constraints compared to US tech giants like Microsoft and Amazon [2] - Alibaba's lack of access to advanced chips and resources that US companies possess may hinder its ability to compete effectively in the AI race [2] Group 2: Financial Performance and Shareholder Actions - Alibaba experienced a 12.8% decline in stock value, following a remarkable 55.3% return in the previous quarter, despite reporting generally positive full-year results [3] - The company achieved an 18% growth in Cloud revenue over the past year, which, while met with some disappointment, is still viewed positively [3] - Alibaba has been actively engaging in share buybacks, repurchasing over 5% of its shares for the year ending March 2025, which is seen as a favorable action by investors [3]