Here’s a simple business idea: build something cool, give it away for free to get everyone using it, and then figure out how to make money from it later. Alibaba Group Holding Ltd (BABA) has been doing a version of that with its AI, building popularity through open-source models. Now, it’s very much in the "figure out how to make money" phase.
The Chinese tech giant is accelerating its push into proprietary AI, and it’s not being subtle about it. The company just introduced Qwen3.6-Plus, an AI model focused on so-called "agentic" tasks. This marks its third proprietary model release in just a few days, following upgrades to an image-generation platform and a multimodal model. According to reports, all three are closed-source, meaning developers can’t peek under the hood or tinker with the code.
This is a notable shift. While other Chinese AI players like MiniMax Group and DeepSeek often open their models to drive adoption, Alibaba is locking theirs down. The goal is pretty clear: control and cash. By keeping the code proprietary, Alibaba retains control over the technology and, crucially, can charge users directly for access. It’s a move from building a user base to building a revenue stream.
This isn't happening in a vacuum. The company is taking a multi-pronged approach to improve its financial performance. It recently launched the Wukong agentic AI service for enterprise clients and has increased prices for its cloud and storage services. The plan is to integrate this new Qwen3.6-Plus model into Wukong, its main Qwen app, and other tools, essentially building a commercial AI ecosystem it can monetize.
What's the Stock Telling Us?
So, what does the market think of this aggressive monetization pivot? Let’s look at the tape.
At a recent price of $123.83, Alibaba was trading about 4.45% below its 20-day simple moving average. That suggests the near-term trend is still leaning downward. Zoom out a bit, and it looks even softer: the stock was a hefty 18.63% below its 100-day moving average, indicating the intermediate-term trend has been under real pressure.
There might be a faint silver lining in the momentum. The Moving Average Convergence Divergence (MACD), a trend and momentum gauge, showed a reading of -6.3426 versus a signal line of -6.6463. When the MACD is above its signal line like this, it often suggests that downside momentum may be starting to ease, even if the overall trend is still weak. It’s a technical way of saying the selling might be slowing down.
- Key Resistance: $130.50 — near the 20-day average area where past rebounds have stalled.
- Key Support: $95.50 — near the 52-week low zone, which has acted as a floor for buyers before.
The Earnings Catalyst and the Street's View
The next major checkpoint for investors is the estimated earnings report on May 14, 2026. The expectations tell a mixed story:
- EPS Estimate: $1.29 (That’s down from $1.73 a year ago)
- Revenue Estimate: $35.35 Billion (That’s up from $32.58 Billion a year ago)
- Valuation: A P/E of 22.1x, which suggests a fair valuation relative to its peers.
So, the story is potentially one of growing sales but shrinking profits—maybe as the company invests in this AI shift. Despite that, analyst sentiment remains positive, albeit with some recent caution. The stock carries a consensus Buy rating with an average price target of $182.21. However, several firms have recently pulled their targets lower:
- Susquehanna: Positive (Lowered Target to $170.00 on March 26)
- JP Morgan: Overweight (Lowered Target to $205.00 on March 20)
- Mizuho: Outperform (Lowered Target to $190.00 on March 20)
ETF Exposure: The Automatic Buyers and Sellers
Alibaba isn't just a stock you buy directly; it's a key holding in several exchange-traded funds (ETFs). That means money flowing in or out of these funds can trigger automatic trades in BABA shares. Some of the top ETF exposures include:
Because BABA carries significant weight in these funds, any major inflows or outflows will likely trigger automatic buying or selling of the stock in the background.
Price Action: In premarket trading on Thursday, Alibaba shares were down 2.25% at $120.95, according to market data.
