Alibaba Cloud Expands Data Centers to Capitalize on AI Boom

As of September 28, 2025, Alibaba Group (NYSE: BABA) is emerging as a leading player in the AI-powered cloud computing space. Last month, Citi analyst Alicia Yap raised the price target on Alibaba's stock to $217, up from $187, while maintaining a Buy rating.

Yap's bullish call comes after Alibaba Cloud, the company's cloud computing arm, hosted its annual Apsara Conference. The analyst cites stronger-than-expected cloud revenue and increased capital expenditure plans by Alibaba to expand its data center capacity. This is in response to the accelerating demand for AI-driven cloud services.

Citi deems Alibaba to be one of the "5-6 global super cloud platforms with full-stack AI services." The firm believes Alibaba is well-positioned to sustain its cloud revenue growth trajectory. The company plans to ramp up its data center infrastructure to cater to the surging interest in AI applications across industries.

While Alibaba faces competition in the cloud space, the analyst sees the company as a top contender given its technological capabilities and dominant position in the Chinese market. Investors will be closely watching Alibaba's cloud performance in the coming quarters as the company capitalizes on the AI-driven digital transformation trend.