Alibaba shares soared in Hong Kong on Friday, climbing as much as 11% after the Chinese tech giant reported robust quarterly earnings.
The strong performance was driven by growth in its cloud intelligence and e-commerce segments, signaling a broader recovery in China’s digital economy.
The stock was last trading 9.18% higher, reflecting investor confidence in Alibaba’s renewed momentum.
Analysts at Nomura highlighted that the company’s e-commerce business is expected to remain strong through the first half of 2025, supported by ongoing trade-in subsidies.
Last July, China allocated 300 billion yuan ($41.5 billion) in special government bonds to stimulate consumer spending and upgrade equipment, further aiding the sector’s recovery.
China’s tech rebound and Alibaba’s AI push
The surge in Alibaba’s stock also comes amid renewed optimism for China’s tech sector.
AI startup DeepSeek has recently drawn attention by positioning itself as a competitor to US tech firms with its R1 model, which claims superior performance at lower costs.
This has fueled bullish sentiment in the broader Chinese technology landscape.
Alibaba has also made significant strides in artificial intelligence, with Barclays noting that its AI cloud business is expanding rapidly.
The company’s flagship AI model, Qwen 2.5-Max, has driven a sharp increase in demand for AI inference services, which now account for up to 70% of new cloud demand.
Barclays analysts project that Alibaba’s AI and cloud infrastructure investment over the next three years will surpass its total spending of the last decade—estimated at nearly 270 billion yuan, CNBC reported.
Jack Ma re-emerges amid regulatory shifts
Adding to the positive sentiment, Alibaba founder Jack Ma made a rare public appearance earlier this week.
Ma participated in a private meeting with Chinese President Xi Jinping, where Xi encouraged private enterprises to innovate and contribute to economic growth in what he called a “new era” for business operations in China.
Alibaba has faced intense regulatory scrutiny since 2020, when Beijing forced its financial affiliate, Ant Group, to cancel its record-breaking initial public offering. However, the latest government signals suggest a more supportive stance toward the private sector, potentially paving the way for Alibaba’s continued expansion.
Alibaba reported a net income of 48.95 billion yuan ($6.72 billion) for the quarter ending December 31, significantly surpassing analyst estimates of 40.6 billion yuan. This represents more than a threefold increase from the 14.4 billion yuan recorded in the same period last year.
The company’s revenue also beat expectations, reaching 280.15 billion yuan, slightly above analyst projections of 279.34 billion yuan. The strong earnings prompted a surge in Alibaba’s U.S.-listed shares, which jumped more than 8% on Thursday.
With solid financials, a recovering e-commerce market, and growing investments in AI and cloud computing, Alibaba appears poised for further growth. Investor confidence is strengthening as the company navigates a shifting regulatory landscape and capitalizes on new opportunities in China’s digital economy.
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