China Regulator Investigates Meituan and Alibaba Units Over Suspected Unfair Competition

Alibaba's U.S. shares rose 4.3% to $113.25 after its Qwen AI model briefly appeared in a U.S. Federal Register search tool. The company's valuation is 5.76% below its GF Value estimate of $120.17. The Qwen model is open-weight, allowing organizations to use it independently, but adoption in sensitive institutions may face challenges due to U.S.-China technology tensions.

China's market regulator is investigating Meituan, Alibaba, Tongcheng, and Tujia for potential unfair competition. The probes follow a 5.2 billion yuan penalty on Trip.com for monopolistic practices. The actions reflect China's focus on regulating its digital travel industry.

Beijing regulators have opened investigations into Alibaba's Fliggy and Meituan's Hotels & Travel platforms under anti-unfair competition laws. Alibaba's travel segment contributes 10% of revenue, while Meituan's targeted business accounts for 68.4% of its revenue. Alibaba reported a quarterly net profit of $1.55 billion, while Meituan had a first-half net loss of HKD 5.34 billion.

Alibaba (BABA) faces a U.S. class action lawsuit and U.S. Department of Defense labeling, causing a 20% stock drop over six months. Analysts like Goldman Sachs maintain a Buy rating, citing cloud growth and AI potential, with a price target of $177. Alibaba raised $10.2 billion for AI and cloud expansion, aiming for profitability by FY29. Wall Street consensus is Strong Buy, with an average target of $188-189, suggesting 75% upside.

Alibaba (BABA) shares rose 4% premarket after announcing a preview of its Qwen3.8 Max LLM, claimed to be one of the most powerful. The model, with 2.4T parameters, will be accessible to developers ahead of a full release. The move follows Moonshot AI's Kimi K3 launch and aligns with Apple's approval to integrate Qwen AI in China. Retail sentiment improved, with BABA stock down 26% YTD.

Alibaba (BABA) may face a fifth week of losses, down 23% in 2026, amid regulatory scrutiny and competitive pressures. The company reportedly bid $1.5B for Pupu, a grocery delivery platform, to strengthen its local commerce presence. Alibaba's stock fell 0.8% overnight, with concerns over heavy spending on AI infrastructure and declining earnings. The company's fiscal Q1 adjusted EPS dropped 95% year-over-year to $0.091.