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Jack Ma’s $76.5 million Alibaba stock purchase is giving investors a fresh reason to reconsider the company’s aggressive AI bet amid mounting spending and re...
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Alibaba by Photo Agency via Shutterstock Alibaba Group Holding Limited (BABA) is sending an unusually strong signal to investors at a critical moment for its artificial intelligence (AI) ambitions. Co-founder Jack Ma has reportedly purchased more than HK$600 million, or roughly $76.5 million, of Alibaba’s Hong Kong-listed shares in recent days, joining Chairman Joe Tsai and CEO Eddie Wu in buying the stock.
The timing of Ma’s purchase is particularly notable. Alibaba recently announced an HK$80 billion ($10.2 billion) share placement, with proceeds earmarked for expanding its full-stack AI capabilities, including infrastructure, chips, and AI models. The capital raise triggered a sell-off as investors worried about dilution, elevated spending, and whether Alibaba can generate sufficient returns from its massive AI investments.
Against that backdrop, insider buying from three of Alibaba’s most prominent figures could provide an important vote of confidence in the strategy. Tsai and Wu have collectively purchased at least $25 million of stock, while Ma’s substantially larger investment underscores the founder’s apparent belief in Alibaba’s long-term AI opportunity.
However, it remains to be seen whether these purchases mark the beginning of a broader turnaround or simply reflect insider confidence during a period of heightened volatility. The company now faces the challenge of proving that its enormous AI spending can translate into sustainable earnings growth and long-term shareholder value.
About Alibaba Group Stock
Alibaba Group is a Chinese multinational technology conglomerate, best known for its dominance in e-commerce (Alibaba.com, Taobao, Tmall), cloud computing, digital media, logistics, and financial services. Headquartered in Hangzhou, China, the company operates a sprawling ecosystem that serves consumers, merchants, and enterprises globally. Alibaba has a market cap of $287.2 billion.
BABA has endured a sharp reversal in 2026 after entering the year with strong momentum. Alibaba shares are trading around 37.8% below their 52-week high of $192.67 reached on Oct. 2, 2025, highlighting the extent of the pullback despite the company’s growing AI ambitions.
Year-to-date (YTD), BABA is down 21.1%, while over the past year, the decline has been much more modest at 5.33%.
Among other factors, the weakness is owing to Alibaba’s decision to raise approximately $10.2 billion through a discounted share placement to fund its AI infrastructure, chips, and model development. Alibaba shares fell as much as 10% in Hong Kong. Meanwhile, Alibaba reported a decline in June-quarter profit, while capital expenditure surged as AI investment accelerated.
Investors have raised concerns about dilution, heavy capital spending, and the near-term impact of AI investment on profitability.
Thus, Jack Ma’s reported $76.5 million purchase comes at a particularly consequential point for the stock.
The stock is trading at a lofty valuation compared to its industry peers at 19.79 times forward price-to-earnings.
Rising Spending Is Causing a Drag on Profits
Alibaba reported its June-quarter 2026 results on Aug. 20, representing the company’s fiscal first quarter of 2027.
Revenue increased 9% year-over-year (YOY) to RMB269 billion ($39.6 billion). The increase was driven primarily by Alibaba’s cloud and AI businesses, while core e-commerce growth remained comparatively modest. Alibaba Cloud’s AI Cloud and Compute Services revenue jumped 45% YOY to RMB48.4 billion ($7.1 billion), marking the fastest cloud growth in 22 quarters. AI-related product revenue reached approximately RMB12.4 billion ($1.8 billion), maintaining triple-digit growth for the 12th consecutive quarter.
The profitability picture was considerably weaker. Net income fell 75% YOY to RMB10.4 billion, while non-GAAP adjusted net income declined 38% to RMB20.7 billion. Adjusted EBITA fell about 30% to RMB27.3 billion, reflecting significantly higher AI-related investment and operating expenses. Its non-GAAP earnings per ADS were RMB8.52 ($1.26), a decrease of 42% YOY.
Capital expenditure was the biggest pressure point. Alibaba spent RMB67.7 billion ($10 billion) during the quarter, up 75% YOY, as it expanded computing capacity, increased GPU procurement and absorbed higher semiconductor costs. The company said it had already spent roughly RMB190 billion of its previously announced RMB380 billion three-year investment plan for AI and cloud infrastructure.
There was, however, meaningful improvement in cloud profitability. Cloud adjusted EBITA rose 133% YOY to RMB5.6 billion ($830 million), with the margin expanding to 12%. Quick-commerce revenue also climbed 45% to about RMB53.3 billion ($7.9 billion), while Alibaba said the business continued to improve unit economics and reduce losses.
The company expects AI-related revenue growth to remain exceptionally strong, with annualized revenue run rate for AI-related cloud services expected to approach $10 billion in the next quarter. Management’s longer-term targets include over RMB100 billion in external cloud revenue by 2030, with management expressing confidence in achieving a roughly 20% cloud gross margin.
Analysts expect the company’s EPS to improve 82% YOY to $5.88 in fiscal 2027 and rise 46.4% to $8.61 in fiscal 2028.
What Do Analysts Expect for Alibaba Stock?
JPMorgan Chase & Co. maintained its “Overweight” rating on Alibaba on Aug. 21, while raising its price target to $210 from $205. The call came immediately after Alibaba’s fiscal first-quarter 2027 earnings report and reflects continued confidence in the company’s AI and cloud growth prospects.
Also, Mizuho Securities reiterated its “Outperform” rating on Alibaba and maintained its $195 price target. The firm’s bullish stance centers on Alibaba’s accelerating cloud business and the growing contribution of AI demand.
Overall, Alibaba has a consensus “Strong Buy” rating. Of the 26 analysts covering the stock, 21 advise a “Strong Buy,” one suggests a “Moderate Buy,” and the remaining four analysts give a “Hold” rating.
The average analyst price target for BABA is $182.29, indicating a potential upside of 56.8%. The Street-high target price of $220.10 suggests that the stock could rally as much as 89.3%.
On the date of publication, Subhasree Kar did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
Related Symbols
| Symbol | Last | Chg | %Chg |
|---|---|---|---|
| BABA | 114.88 | -4.02 | -3.38% |
| Alibaba Group Holding ADR | |||
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