Alibaba: An Overlooked Wholesale Giant Gaining Ground in AI Infrastructure

The Hidden Opportunity Beyond the Tech Titans

When investors scout for AI cloud computing opportunities, they typically fixate on the usual suspects: Amazon Web Services, Microsoft Azure, and Google Cloud. However, a compelling case emerges for Alibaba Group Holding (NYSE: BABA), a company that operates below many Western investors’ radar despite commanding substantial influence in one of the world’s fastest-expanding cloud markets.

While Amazon (NASDAQ: AMZN), Microsoft, and Alphabet dominate conversations about AI infrastructure with 29%, 20%, and 13% market share respectively, Alibaba has quietly secured the fourth position with 4% of the global cloud market. More significantly, the company captures 35.8% of China’s cloud infrastructure market—a commanding wholesale-level presence that shouldn’t be underestimated.

E-Commerce Foundation: A Stronger Growth Trajectory

Before examining Alibaba’s AI ambitions, understanding its broader business foundation is essential. Alibaba operates multiple platforms including its B2B wholesale marketplace Alibaba.com, which features over 5,900 product categories and 200 million+ products serving buyers and sellers across more than 200 nations. The company also runs Taobao for consumer-to-consumer commerce and Tmall for business-to-consumer retail with premium international brands.

In the September quarter, Alibaba’s e-commerce segment (including quick commerce through Taobao Instant Commerce and Ele.me) generated $18.62 billion in revenue, expanding 16% year-over-year. Adding international digital commerce revenue of $4.88 billion (up 10% annually), the company demonstrates faster expansion rates than comparable divisions at larger competitors. This sustained growth in core operations provides substantial cash flow to fuel AI infrastructure investments.

The Real Driver: AI Cloud Infrastructure Acceleration

The genuinely compelling narrative centers on Alibaba’s Cloud Intelligence Group performance. This division generated $5.59 billion in quarterly revenue—a remarkable 34% year-over-year surge. Management attributes this acceleration to two catalysts: expanding public cloud adoption and accelerating integration of AI-related solutions across its product suite.

In September, Alibaba unveiled enhanced capabilities spanning its complete AI infrastructure stack, including high-performance computing systems, specialized servers, advanced storage solutions, distributed computing clusters, and comprehensive model training and inference services. These developments position the company to capture increased demand from enterprises transitioning toward AI-powered operations.

Valuation and Growth Outlook Present Compelling Entry Point

Among the major cloud infrastructure players, Alibaba presents the most attractive forward price-to-earnings and forward price-to-sales multiples. The company projects 9% revenue growth for its next fiscal year—exceeding Amazon’s expected 1.45% expansion and Alphabet’s anticipated 4.7% growth, though trailing Microsoft’s projected 17.8% increase.

However, the context matters considerably. Microsoft approaches a $4 trillion market capitalization, making it an institutional heavyweight rather than a potential growth story. Alibaba, valued at approximately $375 billion, retains meaningful upside potential while operating from an established but underappreciated market position in cloud infrastructure.

Why Alibaba Represents the Strongest AI Cloud Sleeper

For investors seeking non-consensus exposure to AI cloud infrastructure development, Alibaba checks multiple boxes: leadership in one of the planet’s most dynamic markets, accelerating AI product adoption, attractive valuations relative to growth prospects, and an underrated position among Western portfolio managers. As enterprise AI adoption intensifies globally, having already captured dominant wholesale-level infrastructure share in China positions Alibaba for expanded international influence during the next phase of AI infrastructure buildout.