Two big reasons why Alibaba stock is rallying today

Alibaba Group Holding Ltd (NYSE: BABA) is pushing meaningfully higher on Jan. 12 after China announced a sweeping “AI+ Manufacturing” action plan.

Beijing has vowed financial support for small but innovative “little giant” firms, promoting higher research and development spending in its latest push to accelerate AI adoption in manufacturing.

Despite today’s gains, Alibaba stock remains down more than 10% versus its 52-week high.

Significance of ‘AI+ Manufacturing’ plan for Alibaba stock

The announcement from Li Lecheng – China’s minister of industry and information technology – signals a decisive step toward embedding AI into the nation’s manufacturing backbone.

By prioritizing intelligent upgrades, quantum technology, humanoid robotics, and 6G, Beijing is laying the groundwork for a new era of industrial competitiveness.

For BABA stock, this is more than policy rhetoric – it’s a major tailwind that could expand demand for its cloud services and artificial intelligence solutions.

As the government channels capital into innovation and self-reliance, Alibaba’s scale and expertise make it a natural partner for enterprises seeking digital transformation.

Investors see this alignment as a structural advantage, one that reinforces the giant’s role as a key beneficiary of China’s technology roadmap.

Why else are BABA shares pushing higher on Monday?

Alibaba shares are rallying this morning, also because the company’s flagship large language model (Qwen) is experiencing explosive adoption across both enterprise and consumer ecosystems.

According to the Chinese multinational, downloads of the Qwen family have exceeded 700 million on Hugging Face as of today, with December alone outpacing the combined total of the next “8” most popular LLMs.

That dominance underscores how quickly developers are embracing Qwen – particularly because BABA has open-sourced versions across multiple sizes to fit diverse performance needs.

Additionally, the LLM is now embedded in consumer-facing products, such as the Quark app and Ant Group’s health assistant, “A-Fu”.

The creation of a dedicated “Qwen Consumer Business Group” further signals Alibaba’s intent to commercialise its AI breakthroughs – strengthening its growth narrative.

Is it too late to invest in Alibaba Group?

The aforementioned updates confirm BABA shares are strongly positioned to be a key beneficiary of continued AI adoption in 2026.

Still, the Chinese tech stock is currently trading at a forward price-to-earnings (P/E) ratio of a tad above 26, only significantly below its global tech peers, offering exposure to AI at a compelling price.

Financially, Alibaba is expanding its higher-margin cloud and AI businesses – while continuing to generate robust cash flow from its core e-commerce unit.

Recent structural reforms, including streamlining units and elevating artificial intelligence to a key consumer priority, demonstrate management’s commitment to unlocking shareholder value.

Combined with Beijing’s national AI strategy, Alibaba is positioned to capture both domestic and global opportunities.

Simply put, for investors seeking growth, BABA’s exciting blend of scale, innovation, and policy support suggests it may not be too late to load up on its stock in 2026.

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