Alibaba stock jumps 15% following bold AI investment announcements
Alibaba's shares listed in Hong Kong surged by 14.56 percent on Friday, buoyed by quarterly earnings that exceeded expectations and a pledge from management to pursue "aggressive" investments in artificial intelligence and cloud computing in the upcoming three years.
TroibNews 
Alibaba's Hong Kong-traded shares surged by 14.56 percent on Friday, driven by quarterly earnings that exceeded expectations and management's commitment to make "aggressive" investments in artificial intelligence and cloud computing over the next three years.
The company's earnings report indicated an 8 percent revenue increase, totaling 280 billion yuan for the quarter ending in December 2024, marking its fastest revenue growth in over a year.
During Thursday's earnings call, chief executive Eddie Wu revealed that the company intends to invest more in AI and cloud infrastructure in the next three years than it has in the past decade combined, although he did not disclose specific figures for the planned investments. Over the nine months ending December 31, Alibaba's capital investment reached 61.4 billion yuan.
In terms of revenue from cloud and AI-related products, Alibaba reported a 13 percent increase in cloud revenue and triple-digit growth for AI products during the October-December 2024 quarter. Company filings indicate that AI-related products have experienced triple-digit revenue growth for six consecutive quarters.
It's important to note that these results do not incorporate the surge in demand for AI computing resources that emerged following a global "DeepSeek moment" in January, which took place after the reporting period for Alibaba's October-December sales.
The stock rally may be largely attributed to renewed market confidence in Alibaba's prospects within AI and cloud services. The popularity of DeepSeek’s cost-effective, efficient reasoning model suggests that the demand for computing power necessary for large language models could see explosive growth, as enhanced efficiency promotes broader AI adoption. Wu described Alibaba's cloud network as fundamental to the operations of these models, comparing it to an electricity grid.
Beyond just being an infrastructure provider, Alibaba is actively participating as an investor and competitor to DeepSeek and OpenAI in the AI landscape.
Last week, Alibaba revealed a partnership with Apple to introduce AI features on the iPhone. The company has developed its own AI chatbot named Qwen and has open-sourced various large language models under the Qwen brand over the past 18 months to attract more developers to its platform.
Since the beginning of the year, Alibaba's stock has soared by more than 50 percent.
Further enhancing optimism, Alibaba founder Jack Ma made a rare public appearance at a symposium on private enterprises alongside China’s top leaders on Monday, where the government expressed strong support for the private sector, particularly in technology.
Alibaba's impressive performance is indicative of broader gains within China's tech sector in 2025, as investors reevaluate the worth of Chinese AI stocks in comparison to their global counterparts. On Monday, Tencent's market value on the Hong Kong exchange climbed to approximately HK$4.65 trillion, a three-year peak, following its integration of DeepSeek into WeChat, its super app boasting nearly 1.4 billion monthly active users. Since the year's start, the Nasdaq Golden Dragon China Index, which tracks numerous Chinese firms listed on Wall Street, has seen an 18.2 percent increase, significantly outperforming the Nasdaq index's modest 1.1 percent rise during the same timeframe.
Max Fischer for TROIB News
The company's earnings report indicated an 8 percent revenue increase, totaling 280 billion yuan for the quarter ending in December 2024, marking its fastest revenue growth in over a year.
During Thursday's earnings call, chief executive Eddie Wu revealed that the company intends to invest more in AI and cloud infrastructure in the next three years than it has in the past decade combined, although he did not disclose specific figures for the planned investments. Over the nine months ending December 31, Alibaba's capital investment reached 61.4 billion yuan.
In terms of revenue from cloud and AI-related products, Alibaba reported a 13 percent increase in cloud revenue and triple-digit growth for AI products during the October-December 2024 quarter. Company filings indicate that AI-related products have experienced triple-digit revenue growth for six consecutive quarters.
It's important to note that these results do not incorporate the surge in demand for AI computing resources that emerged following a global "DeepSeek moment" in January, which took place after the reporting period for Alibaba's October-December sales.
The stock rally may be largely attributed to renewed market confidence in Alibaba's prospects within AI and cloud services. The popularity of DeepSeek’s cost-effective, efficient reasoning model suggests that the demand for computing power necessary for large language models could see explosive growth, as enhanced efficiency promotes broader AI adoption. Wu described Alibaba's cloud network as fundamental to the operations of these models, comparing it to an electricity grid.
Beyond just being an infrastructure provider, Alibaba is actively participating as an investor and competitor to DeepSeek and OpenAI in the AI landscape.
Last week, Alibaba revealed a partnership with Apple to introduce AI features on the iPhone. The company has developed its own AI chatbot named Qwen and has open-sourced various large language models under the Qwen brand over the past 18 months to attract more developers to its platform.
Since the beginning of the year, Alibaba's stock has soared by more than 50 percent.
Further enhancing optimism, Alibaba founder Jack Ma made a rare public appearance at a symposium on private enterprises alongside China’s top leaders on Monday, where the government expressed strong support for the private sector, particularly in technology.
Alibaba's impressive performance is indicative of broader gains within China's tech sector in 2025, as investors reevaluate the worth of Chinese AI stocks in comparison to their global counterparts. On Monday, Tencent's market value on the Hong Kong exchange climbed to approximately HK$4.65 trillion, a three-year peak, following its integration of DeepSeek into WeChat, its super app boasting nearly 1.4 billion monthly active users. Since the year's start, the Nasdaq Golden Dragon China Index, which tracks numerous Chinese firms listed on Wall Street, has seen an 18.2 percent increase, significantly outperforming the Nasdaq index's modest 1.1 percent rise during the same timeframe.
Max Fischer for TROIB News
