Morgan Stanley reiterated its Overweight rating and $180 price target on Alibaba (NYSE: BABA), highlighting the company’s advancements in AI chip technology and broader ecosystem.
The firm noted that Alibaba recently unveiled its next-generation AI chip, the XuanTie C950, built on a 5-nanometer process and based on the open-source RISC-V architecture. The chip reportedly delivers more than three times the performance of its predecessor and is designed to support large-scale AI models such as Qwen3 and DeepSeek V3.
Morgan Stanley said this development reinforces its positive view that Alibaba controls the full AI technology stack, including in-house chip design through T-Head, cloud infrastructure via AliCloud, advanced open-weight models such as Qwen, and consumer-facing applications.
The analyst emphasized that owning proprietary chips reduces reliance on external suppliers, enables customized application-specific designs, supports rapid capacity scaling, improves cost efficiency by lowering cost per token, mitigates geopolitical risks such as U.S. export controls, and reduces regulatory exposure.
The firm also highlighted the launch of Alibaba’s Token Hub, including the Wukong AI-native enterprise platform, which is expected to enhance commercialization of AI capabilities across model services, enterprise and consumer applications, and future innovations.
Morgan Stanley estimated the value of Alibaba’s T-Head division at $28 billion to $86 billion, translating to approximately $22 per share within its sum-of-the-parts valuation of $245 at the midpoint.
