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StocksMedium•24 March 2026•

1 min read

Morgan Stanley Reaffirms Alibaba as Top Pick Following New AI Chip Launch

Key Facts

1Morgan Stanley reiterated its Overweight rating and $180 price target on Alibaba (NYSE: BABA).

2Alibaba unveiled its next-generation XuanTie C950 AI chip, built on a 5nm process, delivering 3x the performance of its predecessor.

3Morgan Stanley estimates the value of Alibaba’s T-Head chip division at $28 billion to $86 billion.

Morgan Stanley has reiterated its "Overweight" rating on Alibaba (BABA), maintaining a price target of $180 per share. The endorsement follows the unveiling of the XuanTie C950, a next-generation 5nm AI chip developed by Alibaba's T-Head division. This new hardware offers 3 times the performance of its predecessor, significantly enhancing the company's self-sufficiency in the AI hardware-software stack. Analysts estimate the valuation of the T-Head chip unit to be between $28 billion and $86 billion. By leveraging RISC-V architecture, Alibaba aims to mitigate risks associated with U.S. export controls and reduce dependency on external suppliers like Nvidia. This strategic advancement is expected to improve cost efficiency for AliCloud and strengthen its competitive position in the global cloud computing market.

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