Morgan Stanley: Alibaba Group Holding: ATH Developments Reinforce AI Stack and Drive MaaS Revenue
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Morgan Stanley highlights that Alibaba's newly established Token Hub (ATH) has rapidly launched multiple major AI models and tools within a single month. This accelerated deployment reinforces Alibaba's end-to-end AI stack, spanning from chips to applications, and drives token-based monetization alongside accelerating Model-as-a-Service (MaaS) revenue.
Alibaba's MaaS annual recurring revenue (ARR) has already surpassed domestic peers like MiniMax and Zhipu AI. Morgan Stanley projects that MaaS revenue, currently representing a low single-digit percentage of cloud revenue, could account for over 50% of an estimated $100 billion in external cloud and AI revenue within five years.
Recent ATH releases include Qwen 3.6 Plus, the Happy Horse video generation model, the Meoo no-code AI development tool, and the Happy Oyster interactive world model. Furthermore, a major organizational restructuring announced on April 8 has solidified Alibaba's AI-first strategy.
Morgan Stanley values the Qwen MaaS segment at $12 per share, based on a $1 billion ARR assumption and a 30x P/ARR multiple. The firm maintains an Overweight rating and a Top Pick designation on Alibaba, setting a target price of $180. This target implies a 28% upside from the recent closing price of $141.01. The analysts view the scaled disclosure of MaaS revenue as a potentially significant near-term re-rating catalyst for the stock.