Alibaba Shares Climb as Apple Secures Regulatory Approval for Qwen-Powered AI in China
Hong Kong-listed shares rose 5% following reports that Apple Intelligence will utilise Alibaba’s Qwen model for text, image, and conversational services in the region.
Alibaba Group Holding Ltd has reportedly secured regulatory approval to launch Apple Intelligence in China, with its Qwen large language model set to power a significant portion of the experience. The partnership positions the Chinese tech giant at the centre of Apple’s rollout in one of the world’s largest smartphone markets, a development that comes after nearly two years of regulatory delays. Following the report, Alibaba’s Hong Kong-listed shares climbed approximately 5%, reflecting renewed investor confidence in the company’s artificial intelligence capabilities.
Under the arrangement, Qwen will handle core functions including text generation, image understanding, and conversational AI within the region. Baidu is expected to support other functions, such as those related to Siri. For Alibaba, the deal serves as a major validation of its generative AI strategy, potentially creating new avenues to monetise its models across millions of Apple devices while reinforcing its reputation beyond its traditional e-commerce dominance.
The market reaction coincides with strong underlying performance in Alibaba’s cloud division. The company’s Q4 results showed cloud intelligence revenue climbing 38%, with external commercial cloud revenue accelerating at 40%, its strongest pace in several quarters. AI-related products now generate approximately 30% of external cloud revenue, a figure management expects to exceed half of cloud revenue within roughly one year as commercialisation expands.
Alibaba’s American Depositary Receipts (ADRs) have faced headwinds this year, trading down roughly 21% year-to-date. The stock has recovered from a 52-week low near $92 to trade around $115, though it remains under pressure from increased spending on AI infrastructure and self-developed chips, which have been pushed into mass production. Despite these near-term profitability pressures, the company recently reached a $600 million settlement with the U.S. Department of Justice, removing a long-standing legal overhang.
Wall Street analysts generally maintain a constructive outlook on the stock. According to Barchart data, BABA carries a consensus "Strong Buy" rating, with an average price target near $182, implying roughly 58% upside from current levels. While firms such as Morgan Stanley, UBS, Bank of America, and Jefferies remain bullish on cloud growth and AI monetisation, others like HSBC and Daiwa remain cautious regarding near-term margin pressures. The development occurs against a backdrop of broader market activity, including the recent SpaceX IPO debut and a summit between U.S. and Chinese leaders in Beijing.
