Chinese Market AI Surge Defies Wall Street Fears
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy BABA?
Source: Yahoo Finance
- Market Reversal: While Wall Street is gripped by an AI scare, investors in mainland China and Hong Kong are aggressively pursuing AI winners, demonstrating strong confidence in AI's potential, which has significantly boosted valuations for local firms like MiniMax Group and Knowledge Atlas Technology.
- Capital Rotation: In February alone, stocks like MiniMax and Knowledge Atlas doubled in value as capital rotated away from traditional internet giants like Alibaba and Tencent towards 'pure-play' AI companies, indicating a rapid shift in market preference towards emerging technologies.
- Technological Advancements: Zhipu's GLM-5 model recently topped the rankings for open-source models, marking the highest global ranking achieved by a Chinese AI lab, which further enhances market expectations for Chinese AI company valuations.
- Institutional Support: Wall Street heavyweights like Morgan Stanley, Jefferies, and UBS have initiated 'Buy' ratings on MiniMax, projecting its revenue could reach $700 million by 2027, reinforcing the narrative that China is still in the 'penetration phase' of the AI cycle, despite concerns about the sustainability of this momentum.
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Analyst Views on BABA
Wall Street analysts forecast BABA stock price to rise
15 Analyst Rating
15 Buy
0 Hold
0 Sell
Strong Buy
Current: 154.270
Low
180.00
Averages
203.09
High
230.00
Current: 154.270
Low
180.00
Averages
203.09
High
230.00
About BABA
Alibaba Group Holding Ltd is an investment holding company mainly engaged in the provision of technology infrastructure and marketing platforms. The Company operates its business through nine segments. The China Commerce Retail segment is engaged in the China commerce retail business. The China Commerce Wholesale segment is mainly engaged in the operation of 1688.com. The Cloud Intelligence segment provides cloud services. The International Commerce Retail segment provides customer management services, sales of goods and logistics services. The International Commerce Wholesale segment is mainly engaged in the operation of Alibaba.com. The Cainiao Represents Logistics Services segment provides fulfilment services. The Local Services segment’s revenue includes platform commissions, logistics services revenue. The Digital Media and Entertainment segment engages in the operation of Youku and Alibaba. The All Others segment is mainly engaged in the Sun Art, Freshippo and other business.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Chinese Market AI Surge Defies Wall Street Fears
- Market Reversal: While Wall Street is gripped by an AI scare, investors in mainland China and Hong Kong are aggressively pursuing AI winners, demonstrating strong confidence in AI's potential, which has significantly boosted valuations for local firms like MiniMax Group and Knowledge Atlas Technology.
- Capital Rotation: In February alone, stocks like MiniMax and Knowledge Atlas doubled in value as capital rotated away from traditional internet giants like Alibaba and Tencent towards 'pure-play' AI companies, indicating a rapid shift in market preference towards emerging technologies.
- Technological Advancements: Zhipu's GLM-5 model recently topped the rankings for open-source models, marking the highest global ranking achieved by a Chinese AI lab, which further enhances market expectations for Chinese AI company valuations.
- Institutional Support: Wall Street heavyweights like Morgan Stanley, Jefferies, and UBS have initiated 'Buy' ratings on MiniMax, projecting its revenue could reach $700 million by 2027, reinforcing the narrative that China is still in the 'penetration phase' of the AI cycle, despite concerns about the sustainability of this momentum.
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HHLR Advisors Fully Exits Baidu Position
- Position Change: HHLR Advisors fully divested its 1.64 million shares of Baidu in Q4 2026, with an estimated transaction value of $216.23 million, indicating a significant reduction in confidence towards Baidu, leading to a drop in the stake's valuation at quarter-end.
- Asset Management Impact: This sale reduced Baidu's representation in HHLR Advisors' assets from 5.3% to 0%, reflecting a reassessment of the company's future performance, which could influence market sentiment towards Baidu.
- Market Performance: As of February 17, 2026, Baidu's stock price stood at $137.33, up 52.3% over the past year, outperforming the S&P 500 by 29 percentage points; however, HHLR's exit may exert downward pressure on the stock in the short term.
- Future Outlook: Despite significant investments in AI and cloud services, Baidu's revenue remains heavily reliant on advertising, prompting investors to monitor whether the company can stabilize its ad revenue while successfully commercializing AI to ensure future growth.
See More
China's Tech Rise Threatens US Dominance in AI
- Intensifying Tech Competition: Analyst Rory Green highlighted that China could dominate the global tech market in the next 5 to 10 years, breaking the U.S.'s perceived monopoly in technology and AI, which poses a significant threat to America's market position.
- AI Model Development Efficiency: Chinese AI companies are surpassing U.S. counterparts in model development efficiency, achieving strong performance at lower compute costs, which may weaken enterprises' reliance on expensive U.S. services and alter market dynamics.
- Energy Advantage: China has added more power capacity in the past four years than the total in the U.S., providing greater energy support for the expansion of AI infrastructure, thereby promoting the diffusion and application of AI technologies.
- Government Support: The Chinese government is actively backing local AI companies through multi-billion-dollar national investment funds and energy subsidies, creating a policy environment that could accelerate China's rise in the global AI competition.
See More
China's Tech Stack May Dominate Global AI Landscape
- Global Tech Landscape Shift: An analyst predicts that in the next five to ten years, most of the world's population could be using a Chinese tech stack, indicating that China's rapid advancements in AI may threaten U.S. market dominance.
- Computational Efficiency Advantage: China's focus on developing compute-efficient models, particularly achieving strong performance at lower costs, positions it favorably in the AI race, especially given its recent energy supply boom.
- Rise of Open-Source Models: By releasing competitive open-source models, Chinese labs are eroding the commercial moat that U.S. closed-model vendors have relied on, making it more appealing for enterprises to opt for cost-effective Chinese solutions.
- Multipolar AI Ecosystem: As competition shifts from model performance to value realization, the future global AI landscape may become multipolar, with different countries competing across various tech layers, particularly in the Global South where cost considerations dominate technology choices.
See More
Eminence Capital AUM Declines in 2025 Amid Portfolio Shifts
- AUM Decline: Eminence Capital's assets under management fell from approximately $6.54 billion in Q4 2024 to about $6.23 billion in Q4 2025, indicating a decline in investor confidence and increased market volatility, which may impact future investment strategies and returns.
- Concentration Changes: The number of holdings decreased to 39, reflecting a concentrated investment in information technology, consumer discretionary, and communication sectors, particularly with Amazon (AMZN) increasing its allocation to 1.47 million shares, up 59% year-over-year, valued at nearly $340 million, signaling continued optimism in the e-commerce sector.
- New Investments and Exits: New additions in 2025 include Meta Platforms (META) and UnitedHealth Group (UNH), while the fund completely exited stakes in Uber (UBER) and MGM (MGM), demonstrating a focus on emerging markets and a cautious approach to risk assets.
- Alibaba Stake Reduction: Eminence Capital reduced its stake in Alibaba (BABA) from 1.74 million shares to 825,700 shares, a 53% decrease, reflecting a cautious outlook on the company's future prospects, which may affect its strategic positioning in the Chinese market.
See More
Microsoft Executive Warns on US-China AI Competition
- Intensifying US-China Competition: Microsoft President Brad Smith highlighted at the AI Impact Summit in New Delhi that while the US has advantages in chip access and technological innovation, Chinese government subsidies could significantly alter the competitive landscape, particularly in developing markets.
- Impact of Chinese Subsidies: Smith noted that the Chinese government supports its AI firms through multi-billion-dollar national investment funds and energy vouchers, a strategy that previously enabled companies like Huawei and ZTE to disrupt the telecommunications market, forcing some American and European firms into a defensive position.
- Global Data Center Presence: He emphasized that Chinese firms like Huawei and Alibaba have established data centers worldwide, and they may continue to leverage state subsidies to enhance their market competitiveness, posing challenges for companies in other countries.
- Microsoft's Investment Plans: Microsoft aims to invest $50 billion by 2030 to promote AI development in the
See More
Chinese Market AI Surge Defies Wall Street Fears
- Market Reversal: While Wall Street is gripped by an AI scare, investors in mainland China and Hong Kong are aggressively pursuing AI winners, demonstrating strong confidence in AI's potential, which has significantly boosted valuations for local firms like MiniMax Group and Knowledge Atlas Technology.
- Capital Rotation: In February alone, stocks like MiniMax and Knowledge Atlas doubled in value as capital rotated away from traditional internet giants like Alibaba and Tencent towards 'pure-play' AI companies, indicating a rapid shift in market preference towards emerging technologies.
- Technological Advancements: Zhipu's GLM-5 model recently topped the rankings for open-source models, marking the highest global ranking achieved by a Chinese AI lab, which further enhances market expectations for Chinese AI company valuations.
- Institutional Support: Wall Street heavyweights like Morgan Stanley, Jefferies, and UBS have initiated 'Buy' ratings on MiniMax, projecting its revenue could reach $700 million by 2027, reinforcing the narrative that China is still in the 'penetration phase' of the AI cycle, despite concerns about the sustainability of this momentum.
See More
HHLR Advisors Fully Exits Baidu Position
- Position Change: HHLR Advisors fully divested its 1.64 million shares of Baidu in Q4 2026, with an estimated transaction value of $216.23 million, indicating a significant reduction in confidence towards Baidu, leading to a drop in the stake's valuation at quarter-end.
- Asset Management Impact: This sale reduced Baidu's representation in HHLR Advisors' assets from 5.3% to 0%, reflecting a reassessment of the company's future performance, which could influence market sentiment towards Baidu.
- Market Performance: As of February 17, 2026, Baidu's stock price stood at $137.33, up 52.3% over the past year, outperforming the S&P 500 by 29 percentage points; however, HHLR's exit may exert downward pressure on the stock in the short term.
- Future Outlook: Despite significant investments in AI and cloud services, Baidu's revenue remains heavily reliant on advertising, prompting investors to monitor whether the company can stabilize its ad revenue while successfully commercializing AI to ensure future growth.
See More
China's Tech Rise Threatens US Dominance in AI
- Intensifying Tech Competition: Analyst Rory Green highlighted that China could dominate the global tech market in the next 5 to 10 years, breaking the U.S.'s perceived monopoly in technology and AI, which poses a significant threat to America's market position.
- AI Model Development Efficiency: Chinese AI companies are surpassing U.S. counterparts in model development efficiency, achieving strong performance at lower compute costs, which may weaken enterprises' reliance on expensive U.S. services and alter market dynamics.
- Energy Advantage: China has added more power capacity in the past four years than the total in the U.S., providing greater energy support for the expansion of AI infrastructure, thereby promoting the diffusion and application of AI technologies.
- Government Support: The Chinese government is actively backing local AI companies through multi-billion-dollar national investment funds and energy subsidies, creating a policy environment that could accelerate China's rise in the global AI competition.
See More
China's Tech Stack May Dominate Global AI Landscape
- Global Tech Landscape Shift: An analyst predicts that in the next five to ten years, most of the world's population could be using a Chinese tech stack, indicating that China's rapid advancements in AI may threaten U.S. market dominance.
- Computational Efficiency Advantage: China's focus on developing compute-efficient models, particularly achieving strong performance at lower costs, positions it favorably in the AI race, especially given its recent energy supply boom.
- Rise of Open-Source Models: By releasing competitive open-source models, Chinese labs are eroding the commercial moat that U.S. closed-model vendors have relied on, making it more appealing for enterprises to opt for cost-effective Chinese solutions.
- Multipolar AI Ecosystem: As competition shifts from model performance to value realization, the future global AI landscape may become multipolar, with different countries competing across various tech layers, particularly in the Global South where cost considerations dominate technology choices.
See More
Eminence Capital AUM Declines in 2025 Amid Portfolio Shifts
- AUM Decline: Eminence Capital's assets under management fell from approximately $6.54 billion in Q4 2024 to about $6.23 billion in Q4 2025, indicating a decline in investor confidence and increased market volatility, which may impact future investment strategies and returns.
- Concentration Changes: The number of holdings decreased to 39, reflecting a concentrated investment in information technology, consumer discretionary, and communication sectors, particularly with Amazon (AMZN) increasing its allocation to 1.47 million shares, up 59% year-over-year, valued at nearly $340 million, signaling continued optimism in the e-commerce sector.
- New Investments and Exits: New additions in 2025 include Meta Platforms (META) and UnitedHealth Group (UNH), while the fund completely exited stakes in Uber (UBER) and MGM (MGM), demonstrating a focus on emerging markets and a cautious approach to risk assets.
- Alibaba Stake Reduction: Eminence Capital reduced its stake in Alibaba (BABA) from 1.74 million shares to 825,700 shares, a 53% decrease, reflecting a cautious outlook on the company's future prospects, which may affect its strategic positioning in the Chinese market.
See More
Microsoft Executive Warns on US-China AI Competition
- Intensifying US-China Competition: Microsoft President Brad Smith highlighted at the AI Impact Summit in New Delhi that while the US has advantages in chip access and technological innovation, Chinese government subsidies could significantly alter the competitive landscape, particularly in developing markets.
- Impact of Chinese Subsidies: Smith noted that the Chinese government supports its AI firms through multi-billion-dollar national investment funds and energy vouchers, a strategy that previously enabled companies like Huawei and ZTE to disrupt the telecommunications market, forcing some American and European firms into a defensive position.
- Global Data Center Presence: He emphasized that Chinese firms like Huawei and Alibaba have established data centers worldwide, and they may continue to leverage state subsidies to enhance their market competitiveness, posing challenges for companies in other countries.
- Microsoft's Investment Plans: Microsoft aims to invest $50 billion by 2030 to promote AI development in the
See More
