"Large Firms" CICC: Alibaba builds a full-stack AI layout, continues to be the top choice for Chinese internet

According to a research report by China Merchants Securities International, Alibaba-W (09988.HK) has built a full-stack AI layout consisting of a "underlying infrastructure - model - product application ecosystem," including three core sectors: Tongyi Qianwen, Alibaba Cloud, and Ping Tou Ge. The firm believes that the group's full-stack AI advantages are reflected in the following aspects. First, Ping Tou Ge has established a self-controllable computing power infrastructure, with the latest high-end AI chip Zhenwu 810E performance benchmarking against NVIDIA H20. Based on self-developed chips to develop models, it will effectively reduce unit costs through model optimization and resource utilization improvement.

Second, the Tongyi model has built the world's largest open-source ecosystem, expanding user coverage and leading model capabilities. Third, it has a rich and complete product ecosystem that efficiently collaborates data - models - products. Fourth, the cloud business has a clear first-mover advantage, with domestic cloud market share rising to 36% as of the third quarter of last year, and the explosive demand for AI continues to drive growth in traditional cloud service sales.

Overall, the firm expects the group's net profit attributable to the parent company to grow by 42% and 28% year-on-year in the fiscal years 2027 and 2028, respectively; it maintains a target price of $204 for Alibaba (BABA.US) in the U.S. stock market, a target price of HKD 198 for H shares, maintains an "overweight" rating, and continues to list it as a preferred choice in the Chinese internet sector