BABA · Alibaba Group Holding

The thesis

Alibaba's American depositary shares (ADS) are more likely to lag the S&P 500 than lead it into the September-quarter report on 19 November 2026. Cloud revenue grew 45% in the June quarter, but chip supply, Qwen pricing and the cost of funding the AI build-out are unresolved. That report shows whether cloud growth holds and whether the AI application loss narrows.

The ADS closed at $101.52 on 11 November 2026, below its 50-day average of $107.57 and its 200-day average of $123.03 (adjusted daily closes). The shares are down 16.9% over three months. The rating is Low because the company has paid for growth with heavy capital spending, a free cash outflow and an equity placement, and the report a week away is the first test of whether the spending is turning into revenue.

At $101.52, the ADS sits 43.9% below its 52-week intraday high of $181.10 from 22 January 2026. It is also roughly half of the $193 target Citigroup set on 8 October 2026. The market is pricing Alibaba's AI spending as a cost well before it prices it as revenue.

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: chip supply is constrained.

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.
• The chip unit has a listing path. Alibaba said in a 10 November 2026 filing that Hong Kong Exchanges and Clearing approved the proposed spin-off of its T-Head chip unit, The Standard reported. International Financing Review reported the share sale could raise US$2 billion to US$3 billion. Alibaba said the size and structure are not final.
• Analysts keep high targets. Citigroup kept Buy and raised its target to $193 on 8 October 2026. JPMorgan kept Overweight and cut its target to $200 from $210 on 12 October 2026.
• Partnerships keep widening. Benzinga reported on 10 November 2026 that Alibaba is working on Apple Intelligence features for the China market. IBM and Alibaba Cloud expanded a data-streaming partnership on 5 November 2026, and Alibaba Cloud opened its first public region in the Netherlands on 29 October 2026.

Bear case

• Chip supply is constrained. Benzinga reported on 4 November 2026 that Alibaba faces supply constraints on its Nvidia chip orders. On 5 November 2026 it reported that China has not approved large imports of Nvidia H200 chips and that about 600,000 are waiting in Hong Kong.
• Qwen 4 has no disclosed terms. Latenode News reported on 24 September 2026 that Alibaba's Apsara conference 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 (EBITA) 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, and a T-Head listing would sell part of the chip unit to outside holders.
• Executives sold shares in late September. SEC Form 4 filings show Chief People Officer Jiang Fang sold 885,272 ordinary shares at $13.55 on 30 September 2026. Chief Financial Officer Xu Hong exercised options over 229,000 shares and sold 103,046 at $13.68 on 25 September 2026.
• Rivals and policy add pressure. A 13 October 2026 report said Huawei's AI chip shipments nearly doubled to a 28% share of China's market. Treasury Secretary Scott Bessent warned on 22 July 2026 that Chinese AI firms could face sanctions over alleged distillation of US models.

Price setup

The ADS closed at $101.52 on 11 November 2026, after $109.45 on 6 November 2026. That two-session rise and three-session fall left the shares under the 50-day average of $107.57. The 200-day average of $123.03 sits about a fifth above the last close.

The close of $100.96 on 28 October 2026 is the lowest of the autumn, and the last close is just above it. The 52-week closing low is $94.81, set on 26 June 2026. The 3-month change is −16.9%, measured from the $122.16 close of 13 August 2026.

The shares sit below both averages, and the 50-day average remains below the 200-day average. A close back above the 200-day average would show the shares leading again. The report on 19 November 2026 lands before the US open, so the reaction prints in a single session.

Catalysts ahead

• 19 November 2026: September-quarter results, before the US open; call at 7:00 a.m. US Eastern Time. Shows whether cloud growth holds near the June quarter's 45%, whether the AI application loss narrows from RMB13,861 million, and whether management names chip supply as a limit on growth.

What would change the view

A daily close above $123.03, the 200-day average of adjusted closes on 11 November 2026, which would show the shares leading the S&P 500; September-quarter cloud revenue growth above 50% with an AI application loss below RMB13,861 million would also prove the call wrong.

What it trades with

The ADS trades against the Hong Kong line (9988.HK), and each ADS represents eight ordinary shares, so the US price gaps to the Hong Kong session. JD.com and PDD moved with Alibaba on 2 November 2026 in the rebound in Chinese stocks after a weak October. Nvidia's China sales, held up by import approvals, drive both Alibaba's compute supply and the read-through from ByteDance and Tencent orders, which Reuters put at more than $35 billion combined on 20 October 2026. The Apple Intelligence work reported on 10 November 2026 adds a link to a US mega-cap.