Alibaba climbs in pre‑market trading, Sells Gaming Unit for $15B+ to Fund AI Push as Morgan Stanley Highlights Cloud Upside

Market Focus
Aug 18

On August 18, Alibaba rose 3.6% in pre-market trading. Multiple catalysts converged ahead of the company's earnings report scheduled for August 20.

On the news front, Alibaba formally agreed to sell its gaming division Lingxi Interactive to Trustar Capital for over $15 billion, with proceeds earmarked for AI infrastructure investment. The company has set a five-year target of $100 billion in AI revenue. Meanwhile, Morgan Stanley published a quantitative analysis showing Chinese cloud providers can achieve 13%-20% ROIC on AI compute capex with approximately three-year payback periods, singling out Alibaba Cloud as the most advantaged player with 45% upside potential driven by its AI infrastructure plus high-margin MaaS dual-engine model.

Additional momentum came from renowned investor Duan Yongping rebuilding a position of approximately 301,400 shares in Q2, aggressive bullish options flow including a $358,900 dual-call combination targeting $150, and Alibaba's Qwen AI models surpassing 3 billion global downloads on Hugging Face to rank first worldwide.

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