Alibaba Shares Gain Focus on Chip Unit Spinoff Speculation

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Investor attention has returned to Alibaba amid growing market chatter about a potential initial public offering for its semiconductor design subsidiary, T-Head. This speculation arrives as the company's shares have undergone a recent pullback, with analysts suggesting a spin-off could unlock significant hidden value within the conglomerate. The investment bank Nomura responded directly to these reports on Monday, adjusting its valuation of the stock accordingly.

The possibility of a separate listing for T-Head is being viewed as a credible strategic move. While Alibaba has not officially confirmed the plans, market experts interpret the rumors as an effort to better highlight the worth of this specialized division. T-Head focuses on designing chips for cloud infrastructure, artificial intelligence (AI), and Internet of Things (IoT) applications. The speculation gained further traction from sell-side research, with Nomura reaffirming its buy rating on Alibaba on January 26 and significantly raising its price target. The analysts see an IPO of the chip unit as a plausible scenario that could enhance value in the near term. This follows a similar upgrade from Arete Research on January 22.

Fundamentally, this optimism is supported by the performance of Alibaba's Cloud Intelligence Group. Reports from the end of 2025 indicated that revenue from AI-related products grew at a triple-digit percentage rate for consecutive quarters, solidifying artificial intelligence as a central growth engine for the e-commerce giant.

Technical Positioning and Upcoming Catalysts

These fundamental developments coincide with an interesting technical setup for the stock. Currently trading at approximately 143.20 euros, the shares have declined by just over 8% since the start of the year. The Relative Strength Index (RSI) now stands at 29.4, placing the equity in oversold territory—a condition that is drawing notice alongside the burgeoning spinoff narrative.

For investors, the key questions are whether and when Alibaba will formalize any plans for T-Head. The next significant event will be the release of quarterly results, anticipated for mid-to-late February. This report is expected to provide detailed insights into the performance of the company's various business segments.