Apple (AAPL) and Alibaba (BABA) Shares Rise on Reports of Chinese AI iPhone Partnership
Shares in tech giants Apple (AAPL) and Alibaba (BABA) dialed up higher today after reports that they are partnering up to add AI-powered features to iPhones in China.
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China’s Cyberspace Regulator Has the Plans
According to a report from The Information, the two tech titans have already submitted the AI capabilities for approval from China’s cyberspace regulator. However, a timeline for any introduction of the new tech remains unknown. It is understood that Apple had previously looked at working with Baidu (BIDU) in China, but this ended after Baidu’s AI model reportedly failed to meet Apple’s standards. Other names in the frame seeking a bite of an Apple AI partnership in China have included ByteDance, Tencent, and DeepSeek, which was dismissed because of its lack of resources and experience in working with a blue-chip customer.
The Information said Alibaba was the eventual choice partly because of the huge troves of personal data it has gathered on people’s shopping and payment habits, given its strong e-commerce offering. This could help it design more personalized AI tools for iPhone users. The partnership, if confirmed, would be a huge win for Alibaba over its AI rivals. BABA recently launched Qwen2.5-VL AI models, which offer text and image analysis similar to OpenAI’s Operator model.
Apple in Need of a Boost
It would also provide a boost for Apple, which recently reported a 1% year-over-year decline in iPhone revenues to $69.14 billion. Of particular note during that presentation was Apple CEO Tim Cook declaring that demand for the iPhone 16 was stronger in countries where Apple Intelligence had already launched. Apple also needs to ring up more demand in China where it is losing share to domestic rivals such as Huawei, whose range of smartphones have included AI tools since last year. AAPL shares were up 3% today with BABA also up 3%. Baidu shares were down 4%.
Is AAPL a Good Stock to Buy?
On TipRanks AAPL has a Moderate Buy consensus based on 18 Buy, 11 Hold and 4 Sell ratings. Its highest price target is $325. AAPL stock’s consensus price target is $250.94 implying an 6.97% upside.