Chinese technology conglomerate Alibaba Group Holding (BABA) announced on Wednesday that it will invest 10 billion yuan ($1.41 billion) in the development of artificial intelligence-enabled system centered around its Tmall Genie smart speaker. Alibaba aims to cement its leadership in an emerging and fiercely competitive market.
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The money will be used to add more content to Tmall Genie, as well as develop proprietary technology, Alibaba said.
Like the Amazon Echo, the Tmall Genie smart speaker, first launched in 2017, can interact with users via a voice interface to play music, give out weather information, and perform other functions.
The company has released several models, some with displays. The latest model, announced on Wednesday, costs $77.28 and comes with a 10-inch screen.
In 2019, Alibaba shipped 16.8 million smart speakers to consumers, while Baidu shipped 17.3 million, according to research firm Canalys.
TipRanks data shows a Strong Buy consensus towards Alibaba on Wall Street, with 10 out of 10 analysts having Buy ratings on the stock and a $252 price target, representing $16% upside over the coming next months. (See Alibaba stock analysis on TipRanks).
Alibaba releases its quarterly earnings tomorrow. Five-star analyst Aaron Kessler, who is bullish on the stock, recently wrote in a note to clients: “We expect the impact of coronavirus to be largely contained to the March quarter with improved growth resuming in the June quarter.” Kessler has a $290 price target for the stock, representing a healthy 34% upside from today’s level.
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