Alibaba Shares Jump 14% as China Tech Stocks Pull a Hot Streak

Hong Kong-listed shares of Alibaba jumped more than 14% on Friday as China’s technology stocks kept up a blistering rally triggered by the launch of AI model DeepSeek.

Alibaba’s shares were in momentum through the day after opening 10% higher on the back of third-quarter revenues that were above analysts’ estimates.

The Chinese e-commerce giant’s plans to invest more in e-commerce and artificial intelligence also boosted investor sentiment.

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The tech giant’s shares are up more than 70% so far this year and have jumped nearly 90% over the past 12 months. Friday’s rally helped Alibaba stock reach their highest level in more than three years

Overnight, The Chinese e-commerce giant’s US-listed shares jumped 8% in their biggest one-day percentage gain since September last year on the back of its earnings disclosures.

“Alibaba delivered an inflection point quarter as the company’s cloud business was much stronger than the Street and the Chinese stalwart’s AI strategy is heading into its next gear of growth,” Wedbush Securities analyst Daniel Ives said.

The Wall Street Journal also reported on Thursday that billionaire investor Ryan Cohen has increased his personal stake in Alibaba to roughly $1 billion in recent months.

“We do not believe Cohen is alone in his bets on Alibaba as it’s becoming clearer this could be one of the winners in the China AI Arms Race,” Ives said.

The inclusion of Alibaba co-founder Jack Ma in a meeting of private enterprise leaders chaired by China’s President Xi Jinping this month, and photos of Ma shaking hands with Xi, have also raised investor confidence in Alibaba.

Big week for Chinese tech stocks

Meanwhile, Alibaba isn’t alone in riding the AI wave, with Hong Kong-listed Chinese technology stocks keeping up a blistering rally sparked off by the launch of DeepSeek.

The Hang Seng Tech Index jumped up 6.5% on Friday for its best single-day gain since October, to reach its highest level in three years.

Gains on Friday helped the index cement its longest weekly winning streak since May 2020.

Among the top winners on the index, aside from Alibaba, was Lenovo which advanced over 15% to near a ten-year high after quarterly results smashed estimates.

Smartphone and electric vehicle-maker Xiaomi also gained 5.2% to hit a record high.

The ongoing rally is rooted in China’s AI advances and wider regulatory optimism. DeepSeek’s launch last month has reignited global investors’ interest in China and spurred funds into rotating into a sector that still has relatively cheap valuations.

Investors are also betting that Xi’ symposium with the country’s biggest technology leaders is a sign of a policy U-turn following years of sector crackdowns.

“There’s more to go with the valuation discount to emerging markets to narrow more,” HSBC analysts said in a note, also citing the return of foreign investment inflows during the last two weeks.

China’s tech rally has helped add more than $1.3 trillion to the country’s onshore and offshore equity markets in just a month, driving investment flows away from India and into China, said James Cook, investment director of emerging markets at Federated Hermes.

Chinese companies are fast catching up with the global AI frenzy after missing out, Hermes added.

‘A once in a decade opportunity’

That sentiment was also echoed by Alibaba CEO Eddie Wu who, while speaking to analysts, said AI was “the kind of opportunity for industry transformation that only comes around only once every few decades.”

He said Alibaba would invest more in AI and cloud computing over the next three years than it had in the past decade. He did not, however, put an exact figure on the investment amount.

Alibaba has kicked off 2025 as a winner in China’s AI race, drawing in investors with strategic business deals.

“When it comes to Alibaba’s AI strategy … we aim to continue to develop models that extend the boundaries of intelligence,” Wu said, adding that AI could eventually “have significant influence on or even replace 50% of global GDP”.

“Alibaba has bagged a seat on the AI juggernaut and is now reaping rewards,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

Alibaba said it is teaming up with Apple to power iPhones sold in China with its AI solutions, solidifying its foothold in a market where homegrown rival DeepSeek is making waves with cost-effective models.

• Reuters, with additional editing and inputs by Vishakha Saxena

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Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has worked as a digital journalist since 2013, and is an experienced writer and multimedia producer. As a trader and investor, she is keenly interested in new economy, emerging markets and the intersections of finance and society. You can write to her at [email protected]