Alibaba Group (BABA) Is Up 12.7% After US Eases Nvidia AI Chip Sales to China

• In recent days, the US government eased export restrictions by allowing Nvidia to resume sales of H20 AI chips to China, a move expected to benefit Alibaba Group's cloud computing business.
• This development suggests a shift in US-China trade relations and has renewed investor confidence in Chinese technology companies like Alibaba.
• We'll explore how improved access to advanced AI chips could impact Alibaba's investment narrative and business outlook.

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What Is Alibaba Group Holding's Investment Narrative?

To be comfortable as an Alibaba shareholder, you generally need to believe in the company’s potential to sustain growth across its e-commerce and cloud divisions, despite moderating industry growth rates and headline risks. The recent easing of US export restrictions on Nvidia’s H20 AI chips, with Alibaba’s shares jumping as a result, could shift short-term catalysts by enabling its cloud unit to access cutting-edge chips and fuel AI product ambitions. This development may soften immediate concerns around technology sourcing and competitive pressures just as Alibaba’s earnings and cash dividends signal improving financial health. Yet, the bigger picture hasn’t changed overnight: consensus still calls for only modest top-line growth versus the wider market, and caution arises from past consensus earnings downgrades. Whether this policy shift meaningfully rebalances the near-term risks and return outlook remains a question that investors need to watch. On the other hand, shifting analyst sentiment poses a risk to be aware of.

Alibaba Group Holding's shares have been on the rise but are still potentially undervalued by 38%. Find out what it's worth.

Exploring Other Perspectives

Eighty-one Simply Wall St Community members valued Alibaba from as low as US$82.04 per share to well over US$700, an enormous spread in outlook. This broad divergence reflects how differently investors weigh catalysts like advanced AI chip access versus persistent earnings downgrades, all of which are shaping sentiment around Alibaba’s future. Explore several perspectives to get the full picture.

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Build Your Own Alibaba Group Holding Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Alibaba Group Holding research is our analysis highlighting 5 key rewards that could impact your investment decision.
• Our free Alibaba Group Holding research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Alibaba Group Holding's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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