To The Moon

🌐 Alibaba × Nvidia: Can This AI Partnership Spark a New Era for BABA?

🔥 Introduction – A Forgotten Giant Awakens

For years, Alibaba ($Alibaba(BABA)$  ) has been viewed as a fallen star. Once hailed as “China’s Amazon”, the company’s stock collapsed under regulatory crackdowns, slowing growth, and fading investor trust. Many long-term holders gave up, calling it “dead money.”

But in September 2025, the narrative shifted. At the Alibaba Cloud Summit, Alibaba announced a partnership with Nvidia ($NVIDIA(NVDA)$  ) to integrate “Physical AI” into its platforms. Within hours, BABA shares surged 10% in after-hours trading — their sharpest single-day jump in years.

At the same time, Cathie Wood’s ARK Investment disclosed it had purchased $16.3M worth of Alibaba ADRs. Suddenly, the question on everyone’s mind: Is Alibaba staging a true AI comeback — or is this just another short-term bounce?

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1️⃣ Why the Nvidia Deal Is a Big Deal

Cloud Supercharge: Alibaba Cloud is already Asia’s biggest cloud provider. Partnering with Nvidia gives it direct access to world-class GPU power — the “engine” behind modern AI.

Physical AI Edge: Unlike generative AI that lives in chatbots, “Physical AI” aims to power real-world applications: delivery robots, logistics hubs, and smart warehouses. For Alibaba, this connects directly to its e-commerce empire.

Global Validation: Nvidia’s involvement boosts Alibaba’s credibility in the international market, where doubts over Chinese tech competitiveness have been strong.

This partnership matters because it rebrands Alibaba from just an e-commerce and fintech player into a serious contender in AI infrastructure.

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2️⃣ Market Reaction – Dormant No More

Alibaba’s stock has struggled for years, yet this announcement flipped sentiment almost overnight.

Shares closed around $88 in September 2025.

After-hours surge: +10%, marking the sharpest rally this year.

Year-to-date: Up about 28%, slightly ahead of the Nasdaq’s 20% gain.

Valuation: Still inexpensive at just 11× forward earnings, compared with 20–30× for U.S. mega-cap tech.

This rally shows how quickly markets can re-rate a company when expectations are low but a powerful catalyst appears.

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3️⃣ The Bull Case – Why AI Could Be Alibaba’s Reset Button

Cloud Growth Potential: Cloud already contributes over $15B annually. AI features could accelerate adoption by enterprise customers.

Partnership Halo: Nvidia’s name alone attracts attention — and could help Alibaba win clients beyond China.

Institutional Support: ARK’s $16.3M stake isn’t game-changing by size, but it signals renewed global investor interest.

Undervalued Leader: Compared with U.S. peers, Alibaba still trades at a discount, offering long-term upside if the AI story delivers.

If execution is strong, this could be Alibaba’s chance to pivot from “yesterday’s story” into a next-generation AI-cloud leader.

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4️⃣ The Bear Case – Why Doubts Remain

Execution Risk: Launching buzzwords like “Physical AI” is one thing. Delivering results across e-commerce, logistics, and finance is far harder.

Geopolitical Uncertainty: U.S.-China tensions may restrict Nvidia from providing its most advanced chips, limiting Alibaba’s ambitions.

History of False Dawns: Alibaba has sparked investor hope before — restructuring in 2021, spin-off plans in 2023 — but those rallies quickly faded.

Crowded AI Field: Competitors like Tencent, Huawei, and Baidu are also chasing AI leadership. The battle will be capital-intensive and fierce.

These risks remind investors that while the upside is attractive, Alibaba’s turnaround is far from guaranteed.

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5️⃣ Personal Reflection – Lessons from My BABA Journey

I first bought $BABA in 2020, believing it was unstoppable. Instead, regulatory crackdowns and slowing growth punished the stock. That experience taught me a painful lesson: macro and policy risks can outweigh even the best business models.

This new AI partnership feels different — not because it guarantees success, but because it ties Alibaba’s growth story to a global technology leader. Still, I approach it with cautious optimism: Alibaba has potential, but it must prove it can execute.

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6️⃣ Conclusion – Catalyst or Mirage?

Catalyst: The Nvidia partnership offers Alibaba a credible path to reinvent itself as an AI-powered cloud leader.

Valuation Advantage: At 11× earnings, BABA trades at a steep discount, leaving room for upside if sentiment shifts.

Caution Warranted: Execution challenges, regulation, and competition remain major risks.

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