On Thursday, February 6th, 2025, sign for Alibaba Group Holding Ltd. headquarters in Hangzhou, China.
Qilai Shen | Bloomberg | Getty Images
AlibabaHong Kong’s listed stocks surged more than 19% on Monday as China’s technology giant cloud computing unit accelerated strong quarterly results, but details of the development of new AI chips have been revealed.
It’s the highest stock level since March. Investors support the company’s performance improvements in its major cloud units, and are pleased with the tech giant’s investment in new sectors, particularly in China’s highly competitive so-called “instant commerce.”
Hong Kong’s rally is built on momentum AlibabaFriday’s earnings report, with stocks listed in New York rising nearly 13%.
Last week, Alibaba posted revenues for the June quarter ($34.733 billion) of 24.765 billion yuan, showing a 2% year-on-year rise, despite missing analyst expectations. The advantage was a 78% annual spike in net profit ahead of forecasts.
The Chinese company’s cloud computing unit is a bright spot with revenue growth of 26% per year, with a faster growth rate than last quarter. Alibaba’s cloud growth has accelerated over the past few quarters.
Like some of China and the US’s high-tech rivals, Alibaba invests in AI infrastructure, develops its own models and sells AI services for its cloud computing units. Investors see the division as key to the company’s efforts to monetize artificial intelligence, like Microsoft and Google.
AI-related product revenues “we have maintained three-digit year-over-year growth for the eighth quarter in a row,” the company said Friday.
On the same day, CNBC reported that Alibaba is developing a new AI chip. This also supported the stock price rally on Monday.
Meanwhile, Alibaba’s core e-commerce business has shown signs of a comeback, but the company has jumped into China’s cutthroat instant commerce space. This is a feature introduced this year in Taobao, one of Alibaba’s leading Chinese e-commerce apps. It will provide delivery of specific products in China within an hour.
Investment in Quick Commerce has considered Alibaba’s adjusted revenue for its e-commerce business. Investors are giving the company room to invest for now.
