The frenzy over Chinese artificial intelligence is turning Alibaba Group Holding Ltd. into an investor favorite again, injecting new life into an e-commerce giant that had nearly sunk into obscurity following a years-long regulatory crackdown.

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.

Apple sales have been struggling in China–iPhone revenue slumped 25% there in the fourth quarter–as the trade wars between the two biggest economies heated up.