On August 25, according to the Science and Technology Innovation Board Daily, as Alibaba launched a share placement, the company’s founder Jack Ma has been increasing his stake in Alibaba’s Hong Kong-listed shares over several days, with the total exceeding HK$600 million.
Previously,Alibaba Group Chairman Joe Tsai and CEO Eddie Wuhad alreadystepped up to increase theirstakes in the company,totaling approximately HK$120 million. Among them,Joe Tsai purchased 720,000 Alibaba Hong Kong shares at an average price of around HK$112, spending about HK$80 million; CEO Eddie Wu bought 350,000 Alibaba Hong Kong shares at an average price of roughly HK$111.6, spending about HK$40 million.
Jack Ma’s and Alibaba’s senior management’s stock purchases, to a certain extent,reflect confidence in the company’s AI strategy. The company plans toplace HK$80 billion in new shares to strengthen AI development.
Alibaba announced on August 23 in a filing to the Hong Kong Stock Exchange that it plans to place 710 million new shares at a placement price of HK$112.7 per share to professional, institutional, or other investors outside the United States who are non-U.S. persons. Assuming all placement shares are fully subscribed by placees, the total expected gross proceeds from the placement will be HK$80 billion, with net proceeds of approximately HK$79.7 billion.
100% of the net proceeds from this placement will be used to invest in full-stack AI capabilities, strengthen AI infrastructure construction, and further consolidate Alibaba’s leading position in the AI field.This marks Alibaba’s first new share placement since its Hong Kong listing in 2019.According to reports, the placement received active subscriptions from long-term investors including global sovereign wealth funds, ultimately achieving nearly 3x oversubscription.
BofA Securities believes that this placement will significantly boost Alibaba’s net cash from US$31 billion to over US$41 billion (with total cash and cash equivalents increasing to approximately US$80 billion). This not only strengthens the balance sheet in advance and broadens funding sources, but also provides ample financial support for the robust growth of its cloud business and the improvement of AI investment returns. BofA maintains its target prices of US$172 for the U.S.-listed shares and HK$168 for the Hong Kong-listed shares, along with a “Buy” rating.
Against the backdrop of operational pressure on traditional e-commerce, AI has become one of Alibaba’s new growth drivers.
Alibaba Group’s first-quarter fiscal 2027 earnings report released on August 20 shows that for the quarter ended June 30, 2026, Alibaba Group’s revenue was RMB 268.953 billion, up 9% year-over-year; operating profit was RMB 15.161 billion, down 57% year-over-year.
Among these results,Alibaba Cloud’s external commercial revenue grew 45% year-over-year in this quarter, the fastest growth in 22 quarters; AI-related product quarterly revenue reached RMB 12.376 billion, achieving triple-digit year-over-year growth for the 12th consecutive quarter. The adjusted EBITA for the AI Cloud and Computing Services segment surged 133% year-over-year, with profit margin rising to 12%.
This kind of high growth oftenmeans significant upfrontcapital investment.Alibaba’s earnings report shows thatin this quarter,the company’scapital expenditure reached RMB 67.678 billion, up 75% year-over-year, directly causing free cash flow to expand from a net outflow of RMB 18.815 billion in the same period last year to RMB 44.67 billion. This reflects that the current growth of AI Cloud is still in the stage of “exchanging investment for market share.”
Eddie Wu expects that the company’s annualized revenue (ARR) from AI-related products will approach US$10 billion in the next quarter. He also expressed strong confidence in accelerating the goal of reaching US$100 billion in external cloud revenue by 2030.
Eddie Wu also stated that the return on investment for AI computing power Capex is highly certain, with Capex investments able to break even within three years. Considering that the gross margin of AI-related products is still improving, and the proportion of self-developed chips is increasing, the payback period is expected to shorten to 2.5 years or even 2 years in the future.
Furthermore,Alibabacontinues toreinforce the core position of AI within its business ecosystemthrough organizational restructuring.It is understood that the companyhas integrated its existing businesses into four major segments: Alibaba E-commerce Group, AI Cloud and Computing Services, AI Labs and Applications, and All Others.
Currently, Alibaba has established a full-stack AI layout covering computing power, chips, models, and applications — T-Head’s self-developed chips have supported AI intelligence upgrades for more than 650 enterprises across over 20 industries in China, Alibaba Cloud ranks first in the Asia-Pacific region in scale with growth leaping to second globally, and the Qwen open-source model has the highest download volume worldwide.
As of the close on August 25, Alibaba’s (09988.HK) stock price stood at HK$114.20, up 1.51%, with a market capitalization of HK$2.19 trillion. The previous day, Alibaba’s closing price had fallen 8.54%.
