Alibaba’s shares opened 10% higher in Hong Kong on Friday, reaching their highest level in over three years. This surge followed the company’s report of third-quarter revenues that slightly exceeded analysts’ estimates. Alibaba also announced plans to invest more in e-commerce and AI.
The Chinese e-commerce giant saw its U.S.-listed shares jump 8%, marking the largest one-day percentage gain since September of the previous year. They closed at US$135.97, the highest level in more than three years.
“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,” said Wedbush Securities analyst Daniel Ives.
Additionally, the Wall Street Journal reported that billionaire investor Ryan Cohen has increased his personal stake in Alibaba to around $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 noted.
During a call with analysts, Alibaba CEO Eddie Wu described AI as “the kind of opportunity for industry transformation that only comes around only once every few decades.” He stated that Alibaba would invest more in AI and cloud computing over the next three years than it had in the last decade, although he did not specify the investment amount.
For the three months ending December 31, the company’s revenue was 280.15 billion yuan ($38.58 billion), slightly above the 279.34 billion yuan expected by 17 analysts polled by LSEG.
To revive consumer spending and drive sales, Chinese retailers like Alibaba have cut prices and ramped up promotional offers.
Healthy demand from international markets and increased customer spending toward the year-end helped boost sales.
Alibaba’s domestic e-commerce platforms, Taobao and Tmall Group, experienced a revenue growth of 5% for the quarter. Company executives indicated that this division would focus on stabilizing market share in the near future.
AI JUGGERNAUT
Alibaba has started 2025 strong in China’s AI race, attracting investors with strategic business deals. The company’s share price has risen over 60% since the year’s beginning.
“When it comes to Alibaba’s AI strategy … we aim to continue to develop models that extend the boundaries of intelligence,” Wu said. He added that AI could eventually “have significant influence on or even replace 50% of global GDP.”
Investor confidence in Alibaba has also been bolstered by the inclusion of co-founder Jack Ma in a meeting with private enterprise leaders chaired by China’s President Xi Jinping this month, along with photos of Ma shaking hands with Xi.
“Alibaba has bagged a seat on the AI juggernaut and is now reaping rewards,” stated Susannah Streeter, head of money and markets at Hargreaves Lansdown.
The company is partnering with Apple to enhance iPhones sold in China with its AI solutions, solidifying its presence in a market where local rival DeepSeek is gaining traction with cost-effective models.
In late January, Alibaba unveiled an upgraded version of its Qwen 2.5 AI model, claiming it outperforms DeepSeek-V3.
The revenue from Alibaba’s Cloud Intelligence Unit grew by 13%.
Furthermore, the company’s international e-commerce business, which includes cross-border platform AliExpress and wholesale site Alibaba.com, remained one of its fastest-growing segments, with a 32% revenue increase for the quarter. Last November, Alibaba announced the integration of its domestic Chinese and international e-commerce platforms into a single business unit, the Alibaba E-commerce Business Group. This move combined the Taobao and Tmall Group with the Alibaba International Digital Commerce Group.
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