BABA Rises 5% Pre-Market On Reported AI Chip Unit IPO Plans — Retail Bulls Say 'Let’s Continue The Rally'

According to a Bloomberg report citing people familiar with the matter, Alibaba initially plans to restructure the unit, named T-Head, as a business owned partly by the company’s employees.

• Subsequently, Alibaba will consider launching an initial public offering, although the timeline is not known yet, the report added.
• Alibaba’s IPO plans for T-Head are still in the early stages, so finer details about the valuation are not certain yet.
• Reports of Alibaba taking its chipmaking unit public come amid ongoing tensions between the U.S. and China, especially in the semiconductor space.

Alibaba Group Holding’s (BABA) American Depository Receipts (ADRs) were up more than 5% in Thursday’s pre-market trade after a report stated that the company is planning to list its AI chipmaking unit.

According to a Bloomberg report citing people familiar with the matter, Alibaba initially plans to restructure the unit, T-Head, as a business partly owned by the company’s employees.

Subsequently, Alibaba will consider launching an initial public offering, although the timeline is not known yet, the report added. Alibaba’s IPO plans for T-Head are still in the early stages, so finer details about the valuation are not certain yet.

Taking On US Dominance

Reports of Alibaba taking its chipmaking unit public come amid ongoing tensions between the U.S. and China, especially in the semiconductor space. Concerns in the U.S. date back to former President Joe Biden’s term, which have continued into President Trump’s second term.

Last week, the U.S. announced 25% tariffs on exports of Nvidia Corp.’s (NVDA) H200 AI chip, as well as Advanced Micro Devices Inc.’s (AMD) MI325X chip. In December, President Trump announced that tariffs would be levied on Chinese chip imports over what he termed as the country’s “unreasonable” pursuit of dominance in the chip industry. However, these levies have been pushed back to 2027.

On its part, China has been pushing to develop its domestic chip industry. On Wednesday, the China Institute of Atomic Energy successfully developed the country’s first tandem-type high-energy hydrogen ion implanter, named Power-750H, according to a China Daily report. The technology is key in manufacturing advanced power semiconductors.

According to TheFly, analysts at Arete upgraded Alibaba to ‘Buy’ from ‘Neutral’ on Wednesday, with a price target of $190. This implies an upside of nearly 13% from the stock’s closing price on Wednesday.

Here’s How Stocktwits Users Reacted

Retail sentiment on Stocktwits about Alibaba was in the ‘neutral’ territory, while the company was the second-most-trending ticker on the platform at the time of writing.

One bullish user called Alibaba’s IPO plans for its AI chipmaking unit great news. “Let’s continue the rally,” the user added.

BABA ADRs are up 14% year-to-date and 98% over the past 12 months.

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