Alibaba Shares Slide Despite Major AI Platform Expansion

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Alibaba Group's stock declined 3.6% on Friday, a move that puzzled some observers given the company's simultaneous unveiling of a significant upgrade to its Qwen AI application. The enhanced platform is being transformed from a conversational assistant into a central command hub capable of executing tasks across Alibaba's vast digital ecosystem.

The latest iteration of Qwen represents a strategic shift. The focus is moving from AI models that merely understand language to systems that take action, a concept termed "agentic AI." Users can now shop on Taobao, make payments via Alipay, book travel through Fliggy, and use navigation services from Amap—all without ever leaving the Qwen chat interface.

"We are shifting our focus from models that comprehend to systems that execute," stated Wu Jia, Alibaba Group's Vice President, during the presentation in Hangzhou.

The app's adoption has been rapid, reaching 100 million monthly active users just two months after its beta launch in November 2025. A new "Task Assistant" feature demonstrates this actionable capability, with the ability to autonomously call restaurants, process up to 100 documents simultaneously, and plan intricate travel itineraries.

Diverging Views from Market Experts

Analyst opinions on the stock reflect a mixed outlook. On January 15, Morgan Stanley reaffirmed its Overweight rating and a $180 price target. The firm views Qwen as having the potential to become an "all-in-one AI super-app" and anticipates cloud revenue growth exceeding 35% for the third fiscal quarter.

In contrast, Nomura took a more cautious stance, reducing its price target from $215 to $193. Its analysts highlighted dual concerns: a slower pace of monetization in the core e-commerce segment and rising cloud infrastructure costs. The worry is that these expanding costs could pressure margins if AI-related revenues do not scale quickly enough.

The overall analyst consensus remains positive. Seventeen recommend buying the shares, three advise holding, and one suggests selling. The average price target stands near $192, implying a potential upside of approximately 16% from current levels.

Profit-Taking Halts a Strong Rally

The stock's decline appears to be a classic case of "selling the news." Alibaba's shares had enjoyed a substantial rally in the preceding weeks, climbing 16% over the past month and more than 100% in the last twelve months. The AI announcement, while strategically significant, failed to provide an immediate catalyst for further gains.

Investor attention now turns to the quarterly earnings report scheduled for February 19. These results will be scrutinized for evidence that Alibaba's heavy investments in AI infrastructure are translating into tangible revenue. In the most recent period, the cloud business grew by 34%, with AI product-related revenue soaring by triple digits. However, the persistent question is whether top-line growth can outpace the associated rise in expenditures.