Alibaba Climbs 5% as Apple Picks Qwen to Power iPhone AI in China; PDD Holdings Rises 3%, Baidu Gains 2%
Apple just handed a Chinese AI model a permanent seat inside Siri, and the ripple through China's internet stocks reveals which companies win, which get sidelined, and what the deal actually means for Alibaba's bottom line.
Apple (NASDAQ:AAPL | AAPL Price Prediction) just gave a Chinese artificial intelligence (AI) model a place inside the iPhone, and China’s internet stocks are reacting. Alibaba Group (NYSE:BABA) stock is at $102.85, up 5% in morning trading. Despite the gain, Alibaba stock is still down 29% year to date (YTD).
Alibaba owns the Qwen family of models that Apple selected, so the company has the most direct link to the news. Baidu (NASDAQ:BIDU), Apple’s other local partner in China, is benefiting as well. PDD Holdings (NASDAQ:PDD) is leading the rest of the group higher, and the rally is holding up despite weak Chinese factory data.
Apple Brings Qwen to iPhones in Mainland China
Apple confirmed on October 31 that its first Apple Intelligence features reach mainland China with iOS 27.3 in December. Qwen, Alibaba’s model, will run inside Siri, Writing Tools and Visual Intelligence. Access to Qwen comes through a free sign-in, and Alibaba said user requests won’t train its models.
That setup means Alibaba’s return shows up mainly as reach, with little direct revenue attached. A Qwen button inside Siri on recent iPhones is a cheaper way to win users than the heavy marketing behind the company’s own Qwen app. Alibaba’s AI Labs and Applications segment shows why that matters, with an earnings before interest, taxes and amortization (EBITA) loss of RMB 13.86 billion in the most recent quarter. Meanwhile, the company’s AI Cloud and Compute Services revenue rose 45% year over year (YoY) to $7.14 billion in Q1 FY2027.
Only the iPhone 15 Pro and newer models qualify for Alibaba’s Qwen features, and the new Siri AI that Apple showed at its Worldwide Developers Conference (WWDC) isn’t in the first wave. Baidu’s role in the December release hasn’t been spelled out.
Soft Chinese economic data sits in the background of Alibaba’s gain. The National Bureau of Statistics of China said on October 31 that its official manufacturing Purchasing Managers’ Index (PMI) fell to 49.3 in October from 50.1 in September, an unexpected slip into contraction that missed economists’ estimates. Non-manufacturing activity weakened too, with the National Bureau of Statistics of China putting that PMI at 49.7 in October, down from 50.2 in September. Weaker readings pressure Beijing to add stimulus to reach the government’s annual growth target of 4.5% to 5%, which some investors may view as positive for China tech.
What the Peer Group Says About Alibaba
PDD stock is up 3%, the largest gain among the Chinese internet names trailing Alibaba. Without a direct tie to the Apple deal, PDD’s move tracks wider sentiment toward Chinese internet stocks. Sales at PDD came to $16.67 billion in Q2 2026, up 8.1% YoY. JD.com (NASDAQ:JD) rounds out the group of Chinese internet names.
Baidu stock is up 2%, a smaller gain than Alibaba’s even though Baidu is Apple’s other local partner. Ernie, Baidu’s in-house model, competes directly with Qwen, so Apple’s spotlight on Qwen leaves Baidu’s model in a tougher spot. Even after the gain, Baidu stock is still down 40% YTD, a steeper slide than Alibaba’s.
How Alibaba’s Business Differs From PDD and Baidu
Alibaba pairs its Taobao marketplaces with Alibaba Cloud and the full Qwen AI stack, which makes it the only company in this group that owns the model Apple chose. PDD runs the discount platforms Pinduoduo in China and Temu overseas, and it doesn’t operate a first-party foundation model.
Baidu combines search, AI Cloud and the Apollo Go robotaxi service, and its Ernie model now faces a rival that just secured a spot on Apple’s iPhones. Those differences help explain why the moves vary, since only Alibaba benefiting a direct channel onto the iPhone.
Apple’s China Commentary Could Shape Alibaba’s Qwen Rally
Apple’s Greater China revenue reached $64.85 billion in the first nine months of fiscal 2026, a rebound that came without AI features. Fresh China commentary could arrive when Apple reports its quarterly results after the closing bell, so watch for any mention of Alibaba’s Qwen launch.
Alibaba’s upcoming earnings report will show whether Qwen inside Siri turns into lasting user growth. Optimists highlight a free distribution channel on Apple devices and AI cloud revenue already growing fast. Skeptics note that the deal carries little direct revenue, covers a narrow pool of eligible iPhones and arrives while Alibaba’s AI segment is still losing money. Waiting may make sense until the return from the Qwen launch becomes clearer.
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David Moadel is financial writer specializing in stocks, ETFs, options, precious metals, and Bitcoin. David has written well over 1,000 articles for leading online publications, helping investors understand markets, income strategies, and risk.His work has appeared in The Motley Fool, InvestorPlace, U.S. News & World Report, TipRanks, ValueWalk, Benzinga, Market Realist, TalkMarkets, Finmasters, 24/7 Wall St., and others.With a master’s degree in education, David has taught at the elementary, high school, and college levels. That teaching background shapes his writing style: clear, educational, and practical. David has also built a loyal social-media audience by providing trustworthy financial content on YouTube, X/Twitter, and StockTwits.
