Alibaba (NYSE:BABA) shares rose 3.1% in U.S. premarket trading after new reports pointed to the group’s expanding lead in China’s AI cloud market and the growing strategic importance of its Qwen app ecosystem.
A report from LatePost said Alibaba Cloud secured around 35.8% of China’s AI cloud market in the first half of 2025, surpassing the combined share of the second-, third- and fourth-largest competitors. During the period, Alibaba’s AI Cloud revenue reached RMB22.3 billion, underscoring its position as the clear market leader.
The Chinese technology group has also announced that it will hold a press conference for its Qwen app tomorrow. Qwen is evolving into a broad AI agent that goes beyond basic question-and-answer functions, offering features such as price comparisons on Taobao, navigation via Amap, and deeper integration with other Alibaba services.
“We expect a number of BABA’s applications such as Taobao, Figgy, Taobao Instant Commerce, and Alipay to be integrated with Qwen app. Users can experience a variety of different services under different scenarios,” Jefferies analyst Thomas Chong wrote in a note.
Unlike rivals such as ChatGPT, Qwen is available free of charge and provides a wide range of services that benefit from Alibaba’s tightly connected ecosystem.
Jefferies estimates that industry revenue growth reached 149% year on year, with Alibaba accounting for roughly 40% market share in 2025. The broker also expects Alibaba Cloud to capture about 80% of incremental industry revenue growth in 2026.
“If we assume industry growth can maintain at high double-digit or triple-digit YoY growth in 2026, we expect BABA continues to maintain strong YoY growth momentum at triple digit with market share to reach about 60% this year,” Chong added.
Industry research firm Omdia projects that China’s AI revenue will climb 149% year on year from RMB20.83 billion in 2024 to RMB51.8 billion in 2025, highlighting the rapid expansion of the sector in which Alibaba is building a leading position.