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- Baidu and Alibaba gain renewed momentum as AI and cloud services drive investor confidence and reshape China's tech market

- Rapid adoption of Alibaba's Qwen app and rising demand for Baidu's AI compute signal accelerating competition in China's consumer AI market

Baidu and Alibaba (NYSE: $BABA ) moved back into the center of China's technology narrative on Monday after new analyst assessments and product metrics pointed to growing shifts in the country's artificial intelligence and cloud market.

Recent projections from JPMorgan's research desk and updated performance numbers from Alibaba's AI division indicate that large-scale deployments of domestic compute systems, cloud services, and consumer-facing intelligence tools are becoming a defining theme for China's listed technology firms.

JPMorgan Sees a Broader Revenue Mix for Baidu

JPMorgan (NYSE: $JPM ) upgraded Baidu after reviewing new market data, shifting its view from neutral to overweight and lifting its price target on the company's U.S.-listed shares from 110 to 188, a move that implies 69 percent upside. Analyst Alex Yao said the revision reflects expectations that Baidu will draw more of its future momentum from cloud infrastructure and AI-specific business lines rather than older segments that have slowed.

According to the note, Baidu's cloud revenue could move from 23% in 2025 to 61% in 2026, supported in part by rising sales of Kunlun AI chips. Yao said domestic demand for AI compute remains strong and added that local hyperscalers are sourcing more equipment from Chinese suppliers. He also projected continued triple-digit growth in GPU compute revenue, citing increased activity from companies pursuing model training, fine-tuning, and inference on locally available hardware.

Yao warned that Baidu's expansion into AI-driven marketing tools may compress parts of its legacy search advertising business and noted uncertainty over when traditional search ads will settle into a stable range. Baidu's U.S. shares have gained 32% this year and climbed another 3% in premarket trading after the upgrade. LSEG data shows 24 of the 33 analysts covering the company rate it as a buy or strong buy.

Alibaba Tracks Early Uptake of Qwen as AI App Competition Intensifies

Alibaba recorded a surge in adoption for its newly relaunched Qwen app, which drew more than 10 million downloads within a week after the company consolidated its earlier mobile tools into a single AI-focused product on iOS and Android. Shares in Hong Kong rose more than 5 percent after the update.

Strategist Kenny Ng of China Everbright Securities International said the market is watching how the app influences Alibaba's consumer-facing business, noting frequent comparisons to OpenAI's ChatGPT. The release also coincided with Ant Group's disclosure that its multimodal assistant LingGuang exceeded one million downloads in four days.

Alibaba said upcoming updates will add new agentic functions and integrate services across lifestyle, navigation, commerce, education, and health. The company is preparing additional disclosures as it approaches its quarterly earnings release on Tuesday.