Alibaba Stock Jumps 19% on Cloud Gains and AI Chip News

Alibaba shares surged more than 19% in Hong Kong trading on Monday, their highest level since March, after the company reported strong momentum in its cloud computing division and news emerged of a new AI chip in development. The rally followed Friday’s earnings report, when Alibaba’s U.S.-listed shares climbed nearly 13%. For the June quarter, the company posted revenue of 247.65 billion yuan ($34.73 billion), a 2% year-on-year increase that missed analyst estimates. However, net income jumped 78%, surpassing expectations. The standout was its cloud business, which grew 26% annually, an acceleration from previous quarters. The company also noted that AI-related product revenue has seen triple-digit growth for eight consecutive quarters, underscoring its push into artificial intelligence. Investors were encouraged by reports that Alibaba is developing a new AI chip, a move seen as critical to strengthening its position in the global AI race. Much like Microsoft and Google, Alibaba is banking on its cloud services to monetize AI infrastructure and applications. Beyond cloud and AI, Alibaba has been revitalizing its core e-commerce operations while investing heavily in China’s rapidly growing “instant commerce” market. This new feature on its Taobao platform promises deliveries within an hour, positioning the company in fierce competition with domestic rivals. While these investments have weighed on adjusted e-commerce earnings, investors appear supportive of the strategy as long as growth continues. The results highlight a turning point for the Chinese tech giant, which is diversifying beyond traditional e-commerce and aligning itself with the global AI boom. For now, the market is rewarding its shift, with Alibaba’s shares enjoying their strongest rally in months as investors bet on sustained growth in cloud and AI.