Alibaba shares fell approximately 3% in Hong Kong trading. Jefferies lowered its price target for the US-listed shares to $185 from $212. The firm maintained its Buy rating despite the adjustment. Analysts cited increased spending on AI models like Qwen and anticipated losses in non-core segments as primary concerns.
Alibaba recently launched a new AI data center with China Telecom powered by in-house Zhenwu processors. This project supports China's tech self-sufficiency goals but requires significant capital investment. Investors are currently weighing these high development costs against the company's strong growth. The capital-intensive strategy continues to pressure Alibaba's near-term profitability.