Alibaba Is Prepping for an AI Chip IPO. Does That Make BABA Stock a Buy Here?

Core Viewpoint - Alibaba Group is planning to list its chipmaking arm, T-Head Semiconductor, which focuses on developing data center and AI chips for IoT products, with a potential IPO timing yet to be determined [1] Group 1: Company Overview - Alibaba Group is a multinational conglomerate based in Hangzhou, Zhejiang, China, excelling in e-commerce, retail, internet, and advanced technology [2] - The company operates platforms that facilitate consumer-to-consumer, business-to-consumer, and business-to-business exchanges globally [2] - Alibaba also provides cloud computing, logistics solutions, digital media, and entertainment, creating an integrated ecosystem that supports global trade and digital evolution [3] - The company's market capitalization stands at $423 billion [3] Group 2: Stock Performance - Alibaba's stock has seen significant gains, increasing by 102% over the past 52 weeks and 42% over the last six months [4] - The stock reached a 52-week high of $192.67 in October 2025 but has since declined by approximately 10% from that peak [4] - Currently, Alibaba's stock trades at a price-to-earnings ratio of 22.96x, which is higher than the industry average of 20.52x [4] Group 3: Financial Performance - For the second quarter ending September 30, 2025, Alibaba reported a revenue increase of 5% year-over-year to RMB 247.80 billion ($34.81 billion) [6] - The Cloud Intelligence unit's revenue grew by 34% year-over-year to RMB 39.82 billion ($5.59 billion), driven by public cloud revenue growth [6] - AI-related product revenue experienced triple-digit growth compared to the previous year [6]