Alibaba’s Stock Soars Following Impressive Quarterly Results
Alibaba’s stock shares surged in Hong Kong on Friday, jumping as much as 11% before settling at a 9.18% gain. The rally came after the Chinese tech giant posted impressive quarterly results, driven by robust performance in its cloud intelligence and e-commerce segments. Analysts at Nomura expect Alibaba’s e-commerce business to maintain strong momentum in the first half of 2025, supported by ongoing trade-in subsidies.
To stimulate consumer spending, China introduced 300 billion yuan ($41.5 billion) in ultra-long special government bonds last year to support trade-in and equipment upgrade policies. This move has positively impacted domestic e-commerce growth, which is now on a path to sustainable growth and profitability. Vey Sern Ling, senior equity advisor at UBP, noted that the positive sentiment is also boosting the broader Chinese technology sector.
AI and Cloud Investments Fuel Growth
Alibaba’s stock surge aligns with the growing excitement around Chinese tech stocks, particularly after the rise of AI startup DeepSeek, which is challenging the U.S.-led AI ecosystem. Additionally, Alibaba is making significant strides in its AI cloud business with the launch of its Qwen 2.5-Max flagship AI model. According to Barclays, demand for AI inference has seen a sharp increase, now making up 70% of new demand.
Barclays analysts highlighted that Alibaba is planning to invest heavily in AI and cloud infrastructure over the next three years. This investment is expected to surpass the company’s total spending over the past decade, which amounts to nearly 270 billion yuan. This strategic move aims to solidify Alibaba’s position in the rapidly evolving AI and cloud markets, setting the stage for long-term growth.
Regulatory Changes and Leadership Developments
Alibaba’s positive momentum comes amid easing regulatory pressures that have affected the company since 2020. The crackdown began when its financial technology affiliate, Ant Group, was forced to cancel its initial public offering. However, the regulatory environment appears to be softening as Chinese President Xi Jinping recently encouraged private businesses to “display their abilities” and contribute to a “new era” of economic growth.
In a rare public appearance, Alibaba’s founder, Jack Ma, attended a private meeting with President Xi, signaling improved relations between Alibaba and Chinese regulators. This development has boosted investor confidence and contributed to the recent surge in Alibaba’s stock.
For the quarter ending December 31, Alibaba reported a net income of 48.945 billion yuan ($6.72 billion), significantly surpassing analysts’ estimates of 40.6 billion yuan and more than tripling its earnings from the same period last year. The company’s revenue also exceeded expectations, reaching 280.15 billion yuan. Following the earnings announcement, Alibaba’s U.S.-listed shares jumped over 8%, further reflecting investor optimism.
With its strategic investments in AI and cloud infrastructure, along with improving regulatory conditions, Alibaba’s stock appears well-positioned for continued growth in the coming years.
