Why Alibaba Stock Closed at a 2-Year High on Wednesday
Key Takeaways
Shares of Alibaba Group (
BABA
) listed in the U.S. extended their rally into Wednesday amid reports that the Chinese tech and e-commerce giant is
partnering with Apple
(
AAPL
) to create artificial intelligence features for Apple products in China.
The Information
on Tuesday and
The
Wall Street Journal
early Wednesday reported that Apple has submitted AI features developed with
Alibaba
to Chinese regulators for approval, a process that could take several months.
Apple and Alibaba did not immediately respond to requests for comment.
Analysts said that the partnership and rollout of AI features in China could help Apple’s
slowing sales
in China. Upgrades, a key driver of Apple device sales,
have been more common
in regions where the AI features have launched, like the U.S. The deal could also allow Apple to access the data Alibaba has collected through its
e-commerce
offerings to allow the AI products to be more personalized,
Bloomberg
reported.
Alibaba Shares on Five-Day Winning Streak
Wednesday marks the fifth straight winning session for Alibaba’s U.S.-listed shares. Jefferies analysts lifted their
price target
to $150 from $144 on Wednesday, without yet mentioning or factoring in the reported Apple partnership in its research report.
JPMorgan analysts said Tuesday that they don’t expect
Apple
to confirm the partnership until the features are ready to be launched, but said the rollout could mark “significant progress” for Apple in China and help boost sales of the iPhone 16, or the iPhone 17 the company is expected to announce later this year.
Shares of Alibaba rose almost 5% on Wednesday to close at their highest level in more than two years. The stock has gained more than 60% in the past year. Apple shares rose 1.8% Wednesday and have gained more than 25% over the last 12 months.
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