BABA · Alibaba Group Holding Limited

The thesis

Alibaba's cloud business is growing about 45% a year, but the shares have fallen to $100.96 (the 28 October 2026 close), 43.4% below the 52-week high of $178.36, because Qwen pricing and the cost of funding the build-out are unresolved. The September-quarter report, estimated for about 24 November 2026, settles whether cloud growth holds and whether the application loss narrows.

The ADS (American depositary share) has given back the whole rebound since the previous note. It closed at $111.13 on 15 October 2026 and at $105.85 on 2 October 2026, and it now sits under both. MarketBeat attributed the 5.3% jump on 9 October 2026 to unconfirmed reports that Beijing had limited sell orders on Chinese equities. No official confirmation was reported, and the shares have since lost that gain.

The narrative is maturing: the chip and data-centre plan from 22 September 2026 is well known, and attention has moved to China policy, US-China chip supply and Qwen's commercial terms. Alibaba has not disclosed pricing or a release date for Qwen 4 since the 24 September 2026 Apsara preview.

Bullish and bearish views on Alibaba Group Holding Limited

The bull case on Alibaba Group Holding Limited (BABA), in brief: Cloud revenue is growing fast. The bear case: Qwen 4 has no disclosed terms.

Bull case

• Cloud revenue is growing fast. AI Cloud and Compute Services revenue was RMB48,437 million for the quarter ended 30 June 2026, up 45% year over year (results of 20 August 2026, SEC Exhibit 99.1). Jefferies expects cloud growth above 50% in fiscal 2028, per a 9 October 2026 MarketBeat report.
• Analysts keep high targets. Citigroup kept Buy and raised its target to $193 on 8 October 2026. JPMorgan kept Overweight and lowered its target to $200 on 12 October 2026. MarketBeat's 3 September 2026 consensus target across 22 analysts was $188.70.
• Compute supply may be easing. Reuters reported on 20 October 2026 that ByteDance, Alibaba and Tencent placed more than $35 billion of Nvidia chip orders in total. Alibaba's share of that figure was not reported.
• A concrete chip and capacity plan exists. On 22 September 2026 Alibaba unveiled the Zhenwu V900 AI chip and set a goal of more than 20 gigawatts of data-centre capacity by 2032.
• Consumer AI hardware is on sale. Reports dated 14 October 2026 say Qwen N1 glasses started at 2,999 yuan and Qwen Clip earbuds at 1,299 yuan. Sales volumes have not been reported.

Bear case

• Qwen 4 has no disclosed terms. Latenode News reported on 24 September 2026 that Apsara previewed four Qwen 4 tiers with no pricing, API identifiers or release date.
• Applications still lose heavily. The AI Labs and Applications adjusted loss before interest, taxes and amortization was RMB13,861 million in the June quarter (20 August 2026 filing).
• Funding needs are large and shares were issued. The same filing shows capital expenditure of RMB67.68 billion and free cash outflow of RMB44.67 billion. Alibaba announced a HK$80 billion equity placement on 23 August 2026.
• Rivals are gaining compute. A 13 October 2026 report said Huawei's AI chip shipments nearly doubled and reached a 28% share of China's market. A 23 October 2026 commentary headline said Nvidia's China market has effectively vanished.
• Policy and legal risk keeps surfacing. Treasury Secretary Scott Bessent warned on 22 July 2026 that Chinese AI firms could face sanctions over alleged distillation of US models. Headlines dated 26 October 2026 and 27 October 2026 cover a Morgan Stanley warning on China AI, security researchers reporting unusual behaviour in a Qwen model, and a partial Alibaba court win over Pentagon lobbying restrictions. Alibaba remains on the Pentagon's list of Chinese military companies.
• Share-price momentum is negative. The 14-day relative strength index was 37.9 on 28 October 2026, and the ADS is down 17.4% over three months.

Price setup

The last close on 28 October 2026 was $100.96. The 52-week high is $178.36. The ADS is 43.4% below it. The 14-day relative strength index of 37.9 is weak but above the 30 reading that usually marks oversold trading.

Three earlier closes frame the recent range: $113.24 on 18 September 2026 (the last close before Apsara), $111.13 on 15 October 2026 and $105.85 on 2 October 2026. The ADS now trades under all three. The round-number $100 level sits just below the last close.

Crowding evidence is limited. There is no wide gap above a rising moving average, since the shares are in a decline. The HK$80 billion placement of 23 August 2026 is the main share issuance on record. The September-quarter report is about four weeks away, and the date is not yet confirmed.

Catalysts, next 30 days

• ~11 November 2026 (est.): Singles' Day shopping festival. Taobao Malaysia launched its 11.11 festival on 20 October 2026. Festival demand feeds the commerce half of the next results.
• ~12 November 2026 (est.): notice of the September-quarter results date. Alibaba issued its notice on 12 November 2025 last year and reported on 25 November 2025. No official 2026 date has been published.
• ~24 November 2026 (est.): September-quarter results. This is a third-party estimate. The report shows whether cloud growth holds near 45% and whether the application loss falls below RMB13,861 million.
• Undated: Qwen 4 release terms. Any API pricing would be the first commercial disclosure for the model family.

What would change the view

The case breaks if the September-quarter report shows cloud growth well below the 45% of the June quarter, or an application loss above RMB13,861 million with no matching revenue. Another equity or convertible financing announcement would also break it, as would a US Treasury or Commerce action naming Alibaba or new chip export curbs.

On price, a daily close below $100 would take the ADS under the round-number level just beneath the 28 October 2026 close and below every close listed above. That would show sellers overriding the analyst targets of $193 and $200.

A first Qwen 4 pricing disclosure, or cloud growth above 50%, would strengthen the case.

What it trades with

The US line follows the Hong Kong listing (9988.HK) and gaps to its session. Chinese internet peers Tencent, Baidu and JD.com tend to move on the same policy headlines. On 23 September 2026 Alibaba fell about 4% on a reported Beijing probe into AI start-ups (247WallSt). The 9 October 2026 rally came from China-wide market talk. US chip export rules and Nvidia supply news also move the shares. The sample of dated events here is too small to measure the strength of any of these links.