By Adam Clark
Alibaba Group Holding isn't the darling of the Chinese technology sector any more. The internet company is under pressure to reassure the market about its artificial-intelligence progress when it reports earnings Thursday.
Alibaba shares are down in both Hong Kong and U.S. trading this year so far. The company has lost some key AI researchers in recent months and this week announced that it would bring all its AI businesses under a single unit led by CEO Eddie Wu in an effort to sharpen its focus.
The drop is a sharp contrast to other Chinese AI companies like recently listed MiniMax and Zhipu AI -- which trades under the name Knowledge Atlas Technology -- which have soared in recent weeks amid excitement over the adoption of AI agents, or programs which can carry out tasks independently.
In particular the rise of OpenClaw, the popular software that allows users to command and interact with personalized AI agents through messaging apps, has transformed the Chinese AI sector. China's AI companies, including Alibaba, have built dozens of tools designed for integration with OpenClaw.
"OpenClaw's rising popularity marks a meaningful shift in the AI form factor from chat to execution, and we believe this change matters for equities," wrote J.P. Morgan analyst Alex Yao in a research note.
However, Alibaba stock hasn't benefited much from the OpenClaw shift. Yao argues that MiniMax and Zhipu will get the immediate boost due to increased use of their AI models, but larger Chinese technology companies such as Alibaba, Tencent and Baidu will eventually benefit due to the use of their infrastructure.
"As the market moves from installation heat towards monetization validation, we would rotate more meaningfully into Alibaba, Tencent and Baidu, where the key question will be which name captures cloud billing, enterprise deployment and downstream workflow economics," Yao wrote.
There are some early signs of the shift toward monetization. Alibaba's cloud unit said Wednesday it plans to raise prices for its T-head AI computing chips, such as Zhenwu 810E, by 5% to 34%. Prices of its storage service will increase by 30%, according to The Wall Street Journal.
Investors will hope that is an indication Alibaba might be able to give a confident forecast of AI revenue alongside its quarterly earnings Thursday, which will also likely be affected by e-commerce trends and heavy spending in the competitive food-delivery sector.
Alibaba is expected to report a net profit of 25.74 billion yuan ($3.74 billion) for its December quarter, according to a FactSet poll of analysts' estimates, down sharply from 48.95 billion yuan a year earlier. However, revenue is forecast to rise to 285.89 billion yuan ($41.51 billion), up from 280.15 billion yuan a year earlier.
Write to Adam Clark at adam.clark@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 18, 2026 11:10 ET (15:10 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.