key points.
- During China’s Singles’ Day shopping festival, Alibaba1’s systems process peak volumes of up to 583,000 transactions per second2, compared with Visa’s global capacity of about 65,000 transaction messages per second3
- The Chinese technology conglomerate has built cloud infrastructure capable of absorbing the world's largest traffic spikes without crashing or disrupting service
- In AI, adoption of its tools remains robust: its Qwen and Wan AI models have been downloaded more than 600 million times4.
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Originally a holiday to celebrate being single, Singles Day was transformed by Alibaba5 in 2009 into a multi-week retail event focused on self-indulgence. In 2025, some 300,000 merchants participated, selling everything from electronics, fashion and beauty products to home goods, luxury labels and exclusive collaborations. It generated USD 202 billion worth of sales in 2024 – almost four times the USD 41.1bn recorded over Black Friday and Cyber Monday.
Singles Day epitomises Alibaba’s status as an e-commerce juggernaut. However, the technological strength it has built to sustain its ascent is now generating different growth drivers – which should continue to power the company well into the next decade, in our view.
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Massive core e-commerce business enhanced by cloud capabilities
Alibaba provides the digital infrastructure that enables businesses to sell, market and operate online. Its ecosystem benefits from powerful network effects, integrating e-commerce, cloud services and AI tools to deepen customer loyalty through scale and data while raising barriers to entry against competitors.
Core e-commerce remains Alibaba’s economic engine. Revenue grew 5% in Q2 of fiscal 2026, supported by higher user engagement and continued strength in quick commerce6. This performance is reinforced by the scope, resilience and efficiency of Alibaba’s cloud platform, which underpins its e-commerce capability at scale.
In today’s marketplace, speed and scale define dominance. For investors, the company’s combination of breadth of operations, technological depth and ecosystem integration explains the defensible infrastructure supporting Alibaba’s long-term position in a high-growth sector. From advanced AI to extensive cloud capabilities and durable e-commerce earnings, Alibaba remains central to Asia’s digital economy.
Alibaba: the investment view
- Growth theme: Asia’s most advanced AI cloud platform continues to expand rapidly, supported by widespread developer and enterprise adoption of its Qwen and Wan AI models
- Fundamental strengths: the company’s core e-commerce revenues are foundational in Asia’s fast-growing market, and its earnings are strengthened by AI‑driven margin gains as it is one of the most widely adopted AI ecosystems globally
- Differentiation: Alibaba’s scale advantages are unmatched in Asia’s cloud sector. Few competitors can replicate its long-duration infrastructure investments – including nuclear‑backed power agreements for energy-secure facilities.
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Growing AI adoption
Alibaba powers one of the world’s most broadly deployed AI ecosystems7. In 2025, it introduced Qwen3‑Max, a trillion‑parameter flagship large-language model (LLM) built for enterprise‑scale AI applications. Its portfolio has since expanded to include:
- A multilingual, omni-model, Qwen3‑Omni, that supports text, image, audio and video inputs, as well as providing specialised coding and vision‑language systems
- Wan, an AI-driven video creation tool.
Together, these models broaden Alibaba’s reach across industries and use cases.
Crucially, Alibaba has adopted an open‑source strategy, releasing more than 300 models built on its Qwen and Wan capabilities, surpassing 600 million cumulative downloads.
In early 2026, it also broadened the release of OpenClaw, an open-source AI assistant, rolling it out across 19 regions via the Simple Application Server platform. Users can integrate their online service credentials and delegate complex, autonomous tasks such as file management and web-based workflows.
Enterprise adoption continues to build. AI‑related workloads within Alibaba Cloud have grown at triple‑digit rates for nine consecutive quarters, creating persistent revenue momentum for its cloud intelligence unit: revenue rose 34% in Q2 of fiscal 20268 (Figure 1).
Fig 1. Alibaba’s cloud intelligence group revenue (per calendar year)9
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Beyond AI data centres: broad capex commitment
To support its AI ambitions, Alibaba has launched a three-year RMB 380 bn (USD 53 bn) investment programme in next-generation AI infrastructure. The plan encompasses a full upgrade of its computing architecture – prioritising speed, scalability and security – while expanding its global footprint through new data centres in Brazil, France and the Netherlands, with additional facilities planned for Mexico, Japan, South Korea, Malaysia and Dubai in the coming year10.
Recognising that AI at scale requires energy at scale, Alibaba is also securing nuclear‑backed power agreements to support the rising consumption demands of its AI models and ensure long-term, stable energy supply.
This capex strategy marks an important evolution: the company is not merely increasing data‑centre capacity but building a long‑horizon, energy‑secure AI infrastructure layer. Its sustained investment outpaces domestic peers (Figure 2), reinforcing a durable competitive moat in compute capacity.
FIG 2. Chinese hyperscaler spending on cloud capex11
Alibaba: unmatched in Asia’s cloud sector
Alibaba’s combination of AI leadership, large-scale infrastructure and resilient cash flows places the company at the centre of Asia’s digital economy. Its strategic discipline in 2025–2026 strengthens our conviction that cloud and AI will form its next major profit engine, while reinforcing the reach and defensiveness of its core e-commerce franchise. For these reasons, Alibaba remains a core long‑term holding in our Asia High Conviction equity and Emerging Market High Conviction strategies12.
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