Oppenheimer Raises Microsoft Price Target to $570 From $515

Alibaba has unveiled its Zhenwu V900 AI accelerator, described as China's most powerful AI chip, alongside a commitment of more than US$53.00 billion over three years to expand data center capacity for Alibaba Cloud by 2032. The push into homegrown AI infrastructure positions Alibaba as a key domestic alternative to foreign chip suppliers and could materially influence how it competes in China's rapidly evolving cloud and AI market. The spending carries rising financial stakes: Alibaba's Cloud and AI segment grew revenue 45% year over year, yet EBITDA margins compressed and free cash flow swung to a roughly RMB 44.7 billion outflow. Alibaba's narrative projects CN¥1487.6 billion revenue and CN¥176.3 billion earnings by 2029, requiring 12.5% yearly revenue growth and about a CN¥103 billion earnings increase from CN¥73.3 billion today. The most optimistic analysts already expected Alibaba to reach about CN¥1,687.4 billion in revenue and CN¥362.0 billion in earnings by 2029, so the new AI capex push could either support that upbeat view or expose how aggressive those assumptions were.

Alibaba unveiled the Zhenwu V900 AI accelerator at its September 22 developer conference, saying it delivers roughly three times the performance of its predecessor and is scheduled for mass production in early 2027. The company also discussed future Qwen models scaling to 5 trillion to 10 trillion parameters and plans to expand global data-center capacity above 20 gigawatts by 2032. Alibaba can run the homegrown chip across its own cloud, models and internal applications, giving it captive demand before broad sales, though the performance claims come from Alibaba itself and mass production is still expected in 2027. For Nvidia, the concern is structural rather than immediate: export restrictions already limit its ability to serve China's highest-end demand, and each generation of domestic hardware that narrows the gap makes it harder for Nvidia to reclaim its old China position if policy changes. Insider Monkey's database showed 97 hedge funds with reportable Alibaba longs in Q2 2026, down from 102 in Q1, while Nvidia had 285 hedge-fund holders, up from 275; Alibaba short interest was about 41.98 million shares as of August 14, roughly 2.0% of public float with around 4.6 days to cover.

OpenAI, the AI partner of Microsoft, is reportedly seeking a valuation above US$1.2 trillion in a new funding round. The AI group is forecast to burn roughly US$278 billion in cash as it scales infrastructure and product development with Microsoft support. The prospective deal would reinforce OpenAI's role inside Microsoft's broader AI ecosystem, spanning Azure infrastructure and Copilot branded services. The funding push backs the view that rich AI workloads can keep Azure traffic and Copilot adoption growing, while also sharpening questions about capital intensity and dependency on a few large AI partners.