Alibaba's Rally Rests on a $12.9 Billion Delivery War and a $56 Billion AI Bet
Published on 07/13/2026 at 17:27 | Redaktion boerse-global.de
Alibaba shares have surged more than 14% in the past week, climbing to around 99 euros, as a confluence of developments — a $600 million legal settlement, aggressive share buybacks, and mounting confidence in its artificial intelligence strategy — reignited investor appetite. Yet the stock remains roughly 25% lower than it started the year and nearly 39% below its 52-week high of 161.60 euros. The rally feels less like a verdict and more like a reprieve, as the market digests two massive, contradictory capital commitments unfolding simultaneously.
The most expensive of those commitments is Alibaba's war of attrition in China's instant-delivery market. Over the past year, the company has burned through an estimated 87 billion yuan ($12.9 billion) subsidizing rapid grocery and daily-goods deliveries. That sum exceeds the combined losses of rival platforms Meituan and JD.com over the same period. The toll on Alibaba's bottom line has been brutal: fiscal fourth-quarter 2026 revenue crept up just 3%, while adjusted net income collapsed by 99.7%. Management argues the offensive is working — daily active users in the instant-retail division have stabilized above 100 million, and the unit is now targeting profitability by the end of fiscal 2027. To consolidate its position, Alibaba has reportedly offered $1.5 billion to acquire Pupu, China's last major independent fresh-food e-commerce platform.
Juxtaposed against this cash-draining battle is Alibaba's all-in bet on artificial intelligence. The company plans to invest more than 380 billion renminbi in AI infrastructure over the next three years. Early returns are encouraging: analysts expect Alibaba Cloud's April-June quarter revenue to jump 45% year-over-year, driven by AI products that are already contributing meaningfully to external cloud sales. The company's early stakes in AI startups like Zhipu AI and MiniMax have also appreciated significantly after their initial public offerings, validating the ecosystem approach. Meanwhile, Alibaba has been steadily repurchasing its own shares since late June under an authorization from September 2025, providing a consistent floor under the stock.
Should investors sell immediately? Or is it worth buying Alibaba?
The recent rally got an additional boost from a legal resolution. Alibaba and its U.S. payments arm agreed to pay $600 million to settle a case with the U.S. Department of Justice without admitting guilt, removing a cloud of regulatory uncertainty that had hung over the stock. Other risks persist, however: the company faces potential EU tariffs on small parcels, new fees on low-value packages, and lingering governance questions after insider sales were recorded. Moreover, China's consumer spending remains subdued, with retail sales shrinking in certain periods despite stable inflation of 1.0% year-over-year in June 2026.
Technically, the shares are still testing key moving averages. The stock trades about 3% below its 50-day average of 102.56 euros and nearly 20% below its 200-day average of 123.53 euros. The relative strength index of 60.2 suggests room to move in either direction, while an annualized volatility of 43% underscores the stock's propensity for sharp swings. The average analyst price target of 167.38 euros implies upside potential of 68.4% — a gap that reflects both optimism and deep uncertainty.
The next major catalyst will be Alibaba's fiscal first-quarter earnings, due in the coming weeks. Investors will be watching closely for cloud revenue acceleration and any signs that the instant-retail losses are finally narrowing. The rally has reopened the central question: is the delivery war a costly detour or a strategic down payment on Alibaba's next growth engine? The numbers over the next few quarters — not the weekly price action — will provide the answer.
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