Alibaba’s Multi-Front AI Expansion Gains Momentum

Alibaba US01609W1027

Alibaba Group is accelerating its artificial intelligence initiatives across several business segments simultaneously. The Chinese tech giant is deploying new AI tools for local commerce, realizing gains from a portfolio company's public listing, and seeing explosive growth in its travel division. Concurrently, the company is strengthening its footprint in Hong Kong with a major real estate commitment.

The company's investment strategy is bearing fruit, highlighted by the successful initial public offering of MiniMax. This AI startup, backed by Alibaba, priced its Hong Kong listing at the top of its indicated range, at HK$165 per share. The offering raised approximately $538 million and was met with overwhelming investor appetite, with subscriptions covering nearly 800 times the available shares.

In a parallel move to solidify its physical presence, Alibaba has committed $925 million to a real estate investment in Hong Kong.

Deploying AI in Competitive Local Markets

A key operational push involves the rollout of innovative AI-powered tools through Alibaba's mapping subsidiary, Amap. The new feature leverages the company's proprietary "Wan" model to generate immersive 3D virtual tours of restaurants from simple photos and videos. Initially offered free to select merchants, this technology represents a direct competitive challenge to Meituan in the fiercely contested market for local services and food delivery.

The strategic objective is twofold: to reduce marketing costs for restaurant partners while increasing user engagement and retention on Alibaba's own platforms. This initiative exemplifies how the company is translating its cloud and AI infrastructure capabilities into tangible commercial applications.

Should investors sell immediately? Or is it worth buying Alibaba?

Travel Segment Reports Explosive Growth

Recent data from Alibaba's online travel platform, Fliggy, points to a robust recovery in consumer spending on experiences. Figures from the 2026 New Year holiday period reveal dramatic year-over-year increases:

• Domestic hotel bookings: +280%
• Bookings for leisure activities: +270%
• Overseas car rental reservations: +210%
• Per-capita spending on the platform also rose by 30%.

This surge indicates Chinese consumers are confidently reopening their wallets for services and experiences, a positive trend for Alibaba's commission-based revenue streams.

Valuation Gap Attracts Analyst Attention

Despite these operational advances, market experts perceive a significant disconnect between Alibaba's share price and its underlying business value. Morningstar awards the stock its highest five-star rating and calculates a fair value estimate of $258 per share. This implies a potential upside of roughly 40% from current trading levels, a gap the research firm attributes to Alibaba's "wide economic moat."

The broader analyst consensus reflects a more conservative but still bullish average price target near $194. With the stock currently trading at a price-to-earnings multiple of about 21.5, many observers consider the valuation attractive given the high growth rates visible in Alibaba's core business divisions.