Citi published a research report indicating that through cooperation with Alibaba, Apple will be able to provide a localized version of Apple Intelligence in China to meet regulatory requirements. Additionally, Alibaba's selection by Apple confirms Alibaba's progress in AI model and technology capabilities.
Citi believes that, in addition to licensing terms, Alibaba may also benefit from a surge of application developers who will upgrade or release their AI-related applications on the iPhone, considering Tongyi Qianwen or Alibaba Cloud as their model or Cloud Computing Service options, which will open up unlimited monetization opportunities related to AI or cloud.
Citi mentioned that although Alibaba's stock price has performed strongly in the past few weeks, the firm believes that given the future adoption of Tongyi Qianwen or Alibaba Cloud services, there is still room for the stock price to increase. Therefore, it reaffirms the 'Buy' rating for Alibaba's U.S. and Hong Kong stocks, while maintaining the Target Price at $138 and HKD 137, respectively.
