Shares of Alibaba jumped as much as 6% in pre-market trading on June 2, reaching $133.23, after the company unveiled a new AI model capable of processing both images and text, and simultaneously locked in a six-year exclusive partnership with UEFA to provide AI and cloud services for European football's biggest tournaments. The rally was triggered by the launch of the new multimodal AI model and a deal with UEFA to serve as its exclusive AI, cloud, and e-commerce partner starting in 2027. The broader market was mixed, making this a company-specific story — and one that demands scrutiny.
A Six-Year Soccer Deal Puts Alibaba's Cloud on a Global Stage
Alibaba becomes the exclusive AI and cloud partner of the Champions League, Europa League, and Conference League from 2027/28 through 2032/33, plus Euro 2028.
The deal will deploy Alibaba's AI for fan engagement, media management, and immersive content across UEFA's flagship competitions. For investors, this is less about revenue from one contract and more about credibility: a marquee Western sports organization is betting on a Chinese cloud provider over Amazon, Microsoft, or Google.
Cloud Is Growing Fast, but Profits Are Shrinking
In the March quarter, Alibaba's cloud revenue jumped 38% year-over-year to about $6 billion, with AI products making up 30% of all cloud revenue and achieving triple-digit growth for the eleventh straight quarter. Yet the cost is brutal: full-year net income fell 19%, adjusted operating profit dropped 56%, and margins compressed from 14% to 5% as Alibaba poured money into AI infrastructure and quick commerce. Free cash flow turned negative for fiscal 2026 — a red flag shareholders should weigh against the growth narrative.
Wall Street Is Betting the Spending Pays Off
JPMorgan raised its price target to $205 and Barclays lifted to $195, both maintaining bullish ratings.
The analyst consensus is "Moderate Buy" with an average target of $188.76 — roughly 44% upside from current levels. But insider activity over the past three months has been exclusively on the selling side, with about $1.5 million in sales and no purchases.
Insiders Selling While Institutions Pile In
Northwestern Mutual expanded its stake by over 7,600% , signaling strong institutional conviction. The disconnect between insider selling and outside buying suggests management may be cashing out equity compensation while external investors bet on Alibaba's $53 billion, three-year AI spending plan. Whether that spending translates to sustainable profits — not just top-line growth — remains the central question for BABA holders heading into the second half of 2026.