The AI arms race has occupied the imaginations of investors for the last couple of years now, if not longer than that, thanks to government involvement. But for regular end users, it hasn’t been around nearly as long. Now, the Chinese are in a rush to build their own AI empire, and Chinese stocks like Alibaba (NYSE:BABA) are leading the way to get China on the board. It hasn’t hurt with investors, either; Alibaba stock is up fractionally in Tuesday morning’s trading.
Alibaba joined several other funding sources to put together at least $600 million for MiniMax, a Chinese startup company that’s focused on developments in AI. It’s done quite well so far and now has a valuation of over $2.5 billion. Further, Alibaba put cash behind Moonshot AI, another AI startup that looks to advance the Chinese AI market. With signs that the Chinese Communist Party is getting behind AI as well, that could mean a larger overall focus.
An Uphill Battle
China is currently behind in AI development. Back in July, Deutsche Welle detailed that China was on track to spend $15 billion just in 2023 alone, and so far, it’s on track to put plenty more in. As to how far behind China is in AI development, that depends largely on who you ask, but “years” is a commonly used metric. Plus, with export limitations on the necessary chips in play, China may have yet another problem in its development cycles; a lack of infrastructure.
What Is the Target Price for Alibaba Stock?
Turning to Wall Street, analysts have a Strong Buy consensus rating on BABA stock based on 15 Buys and three Holds assigned in the past three months, as indicated by the graphic below. After a 18.48% loss in its share price over the past year, the average BABA price target of $101.55 per share implies 40.87% upside potential.
