Alibaba faces a lot of formidable challenges, but it will likely remain China's top e-commerce and cloud company for the foreseeable future. If you expect it to weather the near-term headwinds as it expands its higher-growth overseas commerce, logistics, cloud, and AI businesses, then it could be the perfect time to buy its undervalued stock.

Once the most high-profile name in Chinese tech, Alibaba had several difficult years in the stock market — but the e-commerce giant could be headed for a turnaround. On Wednesday, Alibaba shares in Hong Kong climbed over 8% after The Information reported that it's working with Apple to roll out AI features for iPhones in China.

Alibaba stock rallied again in Wednesday morning trading, pushing shares of the China tech giant up toward a two-year high. A reported partnership with Apple is helping bolster confidence in Alibaba's AI strategy.