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đ Alibaba's $53 Billion AI Gambit
The best opportunities, as usual, hide where everyone's looking but few are truly seeing.
Evelio Silvera
September 25, 2025
Good MorningâŠ
While most investors were fretting about Chinese regulatory overhang, Alibaba quietly doubled down on artificial intelligence with a spending commitment that makes Big Tech's AI budgets look conservativeâand shrewd money like Cathie Wood noticed, breaking a three-year buying hiatus with a $16 million bet that coincided with the stock's surge to four-year highs.
đ Market Trends â Equities end lower as valuation concerns creep in
đ„ïž Market Movers from Fintech.tv â [WATCH] Navigating the Future: How Global Regulations are Shaping the Gaming Industry
And nowâŠ
â±ïž Your 5-minute briefing for Thursday, September 25, 2025:
MARKET BRIEF
Before the Open
As of market close 09/24/2025.
Pre-Market
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Fear & Greed
Markets in Review
Chips, Dips & Clarity: Market Eyes AI Reality Check
S&P 500 lost 0.28% to close at 6,637.97, while the Nasdaq Composite slipped 0.34% to 22,497.86. The Dow fell 171 points to finish at 46,121.28.
The Big Picture:
Investors took a cautious step back for a second straight day, paring down exposure to the overheated AI trade. Giants like Nvidia (NVDA) and Oracle (ORCL) led the retreat, suggesting the market is beginning to stress-test AIâs longer-term valuation story.
But donât mistake caution for collapse. Even with the pullback, the S&P 500 is up nearly 3% this month, defying Septemberâs usual reputation as a losing month. The bull case: a rebalancing, not a reversal.
Meanwhile, energy stocks are quietly leading. With crude oil prices holding above $93/barrel, traditional names are coming back to life. Freeport-McMoRan (FCX) plunged, but not because of market sentimentâitâs battling operational headwinds in Indonesia.
Market Movers:
Intel (INTC) jumped 6.4% after reports it's in talks with Apple (AAPL) for strategic investment. After lagging rivals, Intelâs pivot toward AI infrastructure relevance is getting real attention.
Nvidia fell ~1%, extending a $100B OpenAI deal hangover. Investors worry itâs more vendor-financing than vision, and might prop up demand artificially.
Freeport-McMoRan (FCX) tanked 17% after declaring force majeure at its Grasberg mine. The disruption sliced into expected copper and gold outputâa direct hit to earnings.
What Theyâre Saying:
âTech is probably a little bit extended... I would not say the AI trade is overâbut itâs clearly valuation.â â Jay Hatfield, CEO, Infrastructure Capital Advisors
WHAT WEâRE WATCHING
Events
Today: Bureau of Economic Analysis - Final Gross Domestic Product (GDP) q/q - 8:30am
Why You Should Care: Itâs the broadest measure of economic activity and the primary gauge of the economyâs health.
Today: Department of Labor - Unemployment Claims - 8:30am
Why You Should Care: Although itâs generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. Unemployment is also a major consideration for those steering the countryâs monetary policy.
Earnings Reports
Today: Costco, CarMax, Accenture, BlackBerry Limited
Tomorrow: JinkoSolar, NeoVolta, Taylor Devices
MARKET INSIGHTS
Leading News
Alibaba's AI Bet: Why $53 Billion Is Just the Opening Hand
Photo Credit: Ban Daisy
Why it matters:
China's e-commerce giant is escalating its AI arms race just as Cathie Wood's $16 million purchaseâher first since 2021âsignals institutional capital is rotating back into Chinese tech at precisely the right inflection point.
Zoom Out:
Alibaba's (BABA) 8% surge to a nearly four-year high reflects more than momentum trading. CEO Eddie Wu's acknowledgment that global AI investment will hit $4 trillion over five years positions Alibaba's expanded spending beyond their $53 billion commitment as rational portfolio theory in actionâdiversifying away from pure e-commerce into higher-margin infrastructure plays.
The Nvidia (NVDA) partnership for "physical AI" development reveals strategic sophistication. While Beijing pushes chip independence, Alibaba hedges by accessing Western AI tools for robotics and autonomous vehiclesâa classic example of managing geopolitical risk while capturing exponential growth opportunities.
Key Insights:
Cloud momentum accelerating: 26% year-over-year revenue growth in Q2 demonstrates the flywheel effectâAI investments creating self-reinforcing demand cycles
Global expansion signal: New data centers in Brazil, France, and Netherlands suggest Alibaba is building competitive moats beyond China's regulatory reach
Behavioral finance validation: Wood's re-entry after three-year absence exemplifies contrarian positioning when assets trade below intrinsic value
Market Pulse:
"AI and cloud are Alibaba's engines of growth alongside e-commerce," Wu declaredârefreshingly honest about diversification imperatives.
Bullâs Take:
When infrastructure monopolists with 110% YTD gains still trade at discounts to Western peers, patient capital finds asymmetric opportunities. Alibaba isn't just riding the AI waveâthey're architecting tomorrow's digital backbone.
Market Stories of Note
August Home Sales- Builders Win Despite Rate Reality:
New home sales jumped 20.5% in August despite mortgage rates hovering above 6.6%âproving that when builders offer the right incentives, Americans will buy houses even when money isn't exactly cheap. The real insight isn't the headline number (which analysts suspect is statistically inflated), but rather that inventory dropped to a 7.4-month supply, signaling genuine demand absorption in a market everyone assumed was frozen. Smart money should watch September's data closelyâif rate cuts accelerate this trend while builders maintain their current incentive programs, the housing recovery could unfold faster than Wall Street expects.
Intel's Apple Pivot: Desperation or Strategy?
Intel's courtship of Apple for investment capitalâfollowing Nvidia's $5 billion and SoftBank's $2 billion injectionsâsignals a company that's finally admitting it can't engineer its way out of a financial hole without help. The behavioral finance lesson here is compelling: when former enemies become potential partners (Apple dumped Intel chips in 2020), it usually means the market dynamics have shifted so dramatically that old grudges become luxury items neither party can afford. While a full Apple-Intel reconciliation remains unlikely given Apple's commitment to in-house chips, smart investors should watch whether Intel's government-backed foundry strategy can attract enough diverse customers to justify the 60% stock rally since August.
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