Morgan Stanley has upgraded Alibaba to its top investment pick, replacing Tencent. The firm stated that although Alibaba faces near-term profit pressure, its control over the full AI stack—from chips and cloud infrastructure to models and applications—creates a structural advantage. Analysts, including Gary Yu, noted in a report that Alibaba possesses top-tier self-developed AI chips, China's leading and the world's fourth-largest cloud infrastructure provider, the most widely adopted advanced open-source foundational model globally, and consumer-centric applications. Morgan Stanley forecasts that China's total addressable market for AI chips will reach $67 billion by 2030, with a domestic self-sufficiency rate of 76%.
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