China Opens Competition Probes Into Meituan, Alibaba Travel

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.

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.

China's State Administration for Market Regulation is investigating units of Meituan and Alibaba, along with Tongcheng and Tujia, for suspected unfair competition. The probe follows preliminary findings and a meeting with industry representatives. Meituan, Tongcheng, and Tujia have stated they will cooperate. This investigation aligns with China's recent crackdown on monopolistic behavior, with Trip.com previously fined 5.2 billion yuan for market monopolization.

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.