Alibaba (BABA) Stock Down 12% as Company Restructures AI Division Ahead of Thursday Earnings

TLDR

• Alibaba has launched a new AI business group called Alibaba Token Hub (ATH), led by CEO Eddie Wu, to consolidate all its AI operations.
• A senior Qwen team leader, Lin Junyang, departed earlier this month, raising concerns about the AI division’s future.
• J.P. Morgan analyst Alex Yao maintained an Overweight rating with a $215 price target on the ADRs.
• BABA ADRs are down 12% over the past month but were up 1.1% to $138.18 in Tuesday premarket trading.
• Alibaba reports earnings Thursday, with profits expected to fall 43% year-over-year and revenue expected to rise 9%.

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Alibaba Group’s status as China’s AI frontrunner has taken a few knocks lately — and the company is responding with a structural overhaul.

Alibaba Group Holding Limited, BABA

The company has created a new business unit called Alibaba Token Hub (ATH), announced late Monday. CEO Eddie Wu will lead it directly. ATH brings together Qwen, the Tongyi Laboratory research team, the enterprise-focused Wukong arm, and Alibaba’s AI innovation unit under one roof.

The timing of the move is worth noting. Senior Qwen team leader Lin Junyang left Alibaba earlier this month, part of a broader wave of departures. This came just after Alibaba released its latest Qwen model upgrade, which the company said matched benchmarks set by OpenAI’s GPT, Google’s Gemini, and Anthropic’s Claude.

J.P. Morgan analyst Alex Yao flagged the exits in a research note, calling the departure of “pivotal talent” a concern for Qwen’s trajectory. His worry: if key people leaving slows iteration or causes quality regressions, the open-source flywheel that has been one of Alibaba’s main advantages starts to lose momentum.

That said, Yao isn’t turning bearish. He kept his Overweight rating and $215 price target on BABA ADRs. He suggested the researcher departures may reflect a strategic shift — Alibaba is likely leaning more toward commercial priorities rather than its open-source reputation.

Wukong Enters the Enterprise AI Race

Also on Tuesday, Alibaba launched Wukong, an AI platform for enterprise customers and the flagship product of ATH’s Wukong Business Unit. The platform lets multiple AI agents work together on tasks like document editing, spreadsheet updates, meeting transcription, and research — all in a single interface.

Wukong is currently in invitation-only beta. Users can access it as a standalone desktop app or through DingTalk, Alibaba’s collaboration tool used by over 20 million corporate users. The platform is also set to connect with Slack, Microsoft Teams, and WeChat.

The launch fits neatly into a broader AI agent craze sweeping China’s tech sector. The open-source tool OpenClaw has captured wide attention in recent weeks, and companies including ByteDance, Tencent, and AI startup Zhipu have all moved to release their own agent products. Chinese authorities have flagged security risks, but the pace of launches hasn’t slowed.

Earnings on Deck Thursday

All of this is unfolding just days before Alibaba is due to report quarterly earnings on Thursday. Wall Street is forecasting profits of $1.67 per share — a 43% drop from a year ago — on revenue of $42.1 billion, which would represent 9% growth.

BABA ADRs have dropped 12% over the past month. In Tuesday’s premarket session, they were trading up 1.1% at $138.18.

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