Alibaba Group Holding Ltd. (NYSE: BABA) is doing the thing every hyperscaler eventually does: buying real estate. Not the boring kind. The kind with servers in it.
The Chinese e-commerce and cloud giant is expanding its cloud infrastructure across Europe, the Middle East and Asia as it pours more money into artificial intelligence, according to a Bloomberg report Wednesday. The company plans to open its first cloud regions in Turkey, Finland and the Netherlands over the next 12 months. It will also expand capacity in Malaysia, Germany, the United Arab Emirates, France and Hong Kong.
Alibaba Steps Up AI Infrastructure
The expansion will support more localized cloud and AI services and deepen Alibaba's competition with Amazon.com, Inc. (NASDAQ: AMZN) and Alphabet Inc. (NASDAQ: GOOG) outside Asia, the report said.
Alibaba also unveiled new AI chips for advanced model training and said it is developing foundation models with 5 trillion to 10 trillion parameters.
The company plans to build a 20-gigawatt global data center network by 2032. Citigroup estimates the infrastructure could support more than $160 billion in external cloud revenue.
Alibaba announced a $53 billion, three-year AI investment plan in 2025 and has signaled that capital spending will continue to rise.
Stock Analysis
Alibaba stock fell more than 3% in Wednesday's premarket session as investors turned cautious on large-cap technology and China-linked stocks. Nasdaq futures fell 0.21%, while S&P 500 futures slipped 0.01%.
Alibaba is retreating toward a nearby support area as broader risk appetite weakens. The stock also remains just below several short-term trend indicators. That leaves it sensitive to changes in market sentiment and could amplify near-term moves.
Alibaba shares remain under pressure after falling 28.68% over the past 12 months. The stock is trading about 0.6% below its 20-day simple moving average of $112.89. It is also 15.6% below its 200-day SMA of $132.85. That keeps the longer-term technical picture cautious.
The moving-average structure remains bearish. The 20-day SMA is below the 50-day SMA, while the 50-day SMA remains below the 200-day SMA. The stock formed a so-called death cross in April.
Alibaba could face resistance near the $116 to $118 area, which includes its 50-day moving-average zone. A sustained move above that range could signal improving momentum.
Meanwhile, the relative strength index stands at 53.78. That points to neutral momentum and suggests the stock is neither overbought nor oversold. Key resistance sits near $130.50, while support is around $111.50.
Analyst Outlook
Alibaba trades at a price-to-earnings ratio of about 26.2. The stock carries a Buy consensus rating and an average price forecast of $191.
Recent analyst actions include Susquehanna maintaining a Positive rating and raising its price forecast to $190 on Aug. 28. JPMorgan maintained an Overweight rating and raised its target to $210 on Aug. 21. Barclays also maintained an Overweight rating and lifted its target to $200 on Aug. 21.
MarketDash Edge Rankings
Alibaba's MarketDash Edge scorecard shows a mixed setup.
The stock scores 17.64 for momentum and 15.46 for quality, both considered weak. However, its value score stands at a bullish 91.07. Its growth score is 69.26, which falls in the neutral range.
Overall, the scorecard highlights strong value characteristics alongside weak momentum and quality readings. From a technical perspective, investors may watch whether Alibaba can hold support near $111.50 and reclaim the $116 to $118 moving-average zone.
Top ETF Exposure
Several major emerging-market ETFs hold Alibaba.
The iShares MSCI Emerging Markets ETF (NYSE: EEM) has a 1.97% weighting in Alibaba. The Schwab Emerging Markets Equity ETF (NYSE: SCHE) has a 2.52% weighting, while the iShares MSCI All Country Asia ex Japan ETF (NASDAQ: AAXJ) has a 2.20% weighting.
Because Alibaba represents a meaningful position in these funds, ETF inflows and outflows can contribute to trading activity in the stock.
Price Action
BABA Price Action: Alibaba shares fell 3.34% to $112.42 in Wednesday's premarket trading, according to market data.
