Shares of Alibaba surged 7.3% to ARS 20,850 as investors cheered a deepened partnership with smartphone maker Honor to co-develop an AI-powered operating system for smart devices. The partnership is expected to be formally announced at the World Artificial Intelligence Conference (WAIC), which kicks off Friday in Shanghai — an event elevated this year by President Xi Jinping's first in-person appearance, signaling Beijing's growing priority on AI.
The Deal Puts Alibaba's AI Models Directly on Millions of Phones. The two companies will cooperate across travel, e-commerce, entertainment, and mobile office scenarios , with Alibaba's open-source AI model serving as the foundation for on-device and cloud-based smart assistants.
Alibaba's food delivery, ticketing, and movie-booking apps will be woven into Honor's AI agent ecosystem. For Alibaba, this is a distribution play: every Honor phone running its AI means more cloud computing usage billed back to Alibaba's servers.
Honor Is the Fastest-Growing Phone Brand in the World Right Now. Global smartphone shipments fell 6% year-over-year in Q1 2026, yet Honor's grew more than 25% , and it was the fastest-growing vendor in Europe, with shipments up over 60%.
Honor had already previewed its next-generation "AgenticOS" at MWC Shanghai in June , and this tie-up now anchors Alibaba at its core. Partnering with a brand gaining share this fast gives Alibaba a real-world channel that rivals like Baidu lack.
Cloud Is Already Alibaba's Best Story — But Margins Are Under Pressure. Alibaba's Cloud Intelligence Group posted fiscal 2026 revenue of RMB 158 billion (~$23 billion), up 34% , with AI-related products delivering triple-digit growth for the eleventh straight quarter. Yet adjusted operating profit plunged 84% in the March quarter as the company poured money into AI infrastructure. The Honor deal could help justify that spending — if it drives enough device-linked cloud demand to improve profits per dollar invested.
The Bigger Question Is Whether Hype Matches Revenue. The stock had traded in a narrow range around ARS 19,100–19,500 for a week before today's jump. A 7.3% single-session pop prices in considerable optimism for a partnership that has yet to ship a product. Alibaba's free cash flow turned negative in fiscal 2026 , meaning every new spending commitment carries real balance-sheet weight. Investors should watch WAIC closely this week: the reveal will determine whether this is a genuine platform shift or another conference-stage demo.