Investors Bullish on iPhone AI Prospects as Alibaba Stock Soars 8.6%

Alibaba's stock surged as much as 8.6% following media reports that Apple is collaborating with Alibaba to introduce artificial intelligence (AI) features for iPhone users in China.

Securing a role in powering AI on the iPhone would mark a major breakthrough for Alibaba, whose latest AI models have performed well in global benchmark tests. Alibaba's stock has already gained over 30% in 2025, driven by optimism about the company’s progress in developing AI services and platforms for the world's largest internet market.

In January 2025, Alibaba released benchmark test results showing that its Qwen 2.5 Max model outperformed Meta Platforms Inc.'s Llama and DeepSeek’s V3 model across various evaluations. The company is now considered a leading player in the AI sector, ranking alongside Tencent, ByteDance, and startups like Minimax and Zhipu AI.

Alibaba could serve as a powerful local partner for Apple. Morgan Stanley analyst Erik Woodring commented, “Alibaba is China’s largest e-commerce company, meaning it likely has vast amounts of data that Apple could leverage to offer personalized GenAI features to Chinese consumers. We may also see Apple and Alibaba establish an initial AI partnership, which could eventually expand to other local cloud computing firms in China over time.”