Alibaba Fall After U.S. Throws Wrench in Apple's China AI Deal
Warning! GuruFocus has detected 3 Warning Signs with BABA.
The timing couldn't be worse for Apple either. China is its second-largest market, and its sales there dipped 2.3% last quarter as competition from Huawei and Xiaomi heats up. Analysts warn that without a homegrown AI partner, Apple risks losing its edge in a market where AI-driven features are fast becoming table stakes. Apple has much more to lose than Alibaba if it walks away from the AI deal, noted Vey-Sern Ling at Union Bancaire Privee. A delay or breakdown could force Apple to scramble for alternatives, while its Chinese rivals double down.
For Alibaba, the setback throws a wrench into its comeback story. Investors had rallied behind the stock earlier this year on hopes that its AI momentumespecially with a high-profile partner like Applecould reignite growth. But with Washington's glare intensifying, that narrative could be slipping. Bloomberg Intelligence warns the uncertainty may hold back Alibaba's cloud investment and R&D in the short term. For now, one thing's becoming clearer: this isn't just a tech dealit's another geopolitical battleground.
This article first appeared on GuruFocus.
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