Signage on the Alibaba Group Holding Ltd. headquarters in Hangzhou, China, on Thursday, Feb. 6, 2025.
Qilai Shen | Bloomberg | Getty Images
Alibaba‘s Hong Kong listed shares surged greater than 19% on Monday because the Chinese tech giant’s cloud computing unit drove strong quarterly results, while details emerged over its latest AI chip development.
It’s the best level for the stock since March. Investors have backed the corporate’s improving performance in its key cloud unit and are content with the the tech giant’s investment into latest areas — particularly within the so-called “easy commerce,” which has grow to be incredibly competitive in China.
The Hong Kong rally builds on the momentum of Alibaba‘s earnings report of Friday, when the corporate’s Latest York-listed shares closed nearly 13% higher.
Alibaba last week week posted revenue for the June quarter of 247.65 billion Chinese yuan ($34.73 billion), marking a 2% year-on-year rise that nevertheless missed analyst expectations. On the upside, a 78% annual surge in net income got here in ahead of forecasts.
The Chinese company’s cloud computing unit was a vibrant spot with revenue picking up by an annual 26%, which was a faster growth rate than seen within the previous quarter. Alibaba’s cloud growth has been accelerating over the previous few quarter.
Like a few of its Chinese and U.S. tech rivals, Alibaba has been investing in AI infrastructure and developing its own models, in addition to selling AI services for its cloud computing unit. Investors see the division as key to the corporate’s efforts to monetize artificial intelligence, very like Microsoft or Google.
AI-related product revenue “maintained triple-digit year-over-year growth for the eighth consecutive quarter,” the corporate said Friday.
That very same day, CNBC reported that Alibaba is developing a brand new AI chip, which also supported the share price rally on Monday.
Alibaba’s core e-commerce business has meanwhile been showing signs of revival, while the corporate has jumped into China’s cut-throat easy commerce space in China. It is a feature introduced this yr on Taobao, one among Alibaba’s most important Chinese e-commerce apps, which provides deliveries of certain products in China inside an hour.
Investments in quick commerce weighed on Alibaba’s adjusted earnings for its e-commerce business. Investors have given the corporate some leeway to take a position for now.
