Alibaba (BABA) Surges 3.13% on AI Glasses Launch and Strategic Partnerships – What’s Fueling the Rally?

Summary
• Alibaba Group (BABA) surges 3.13% to $122.36, hitting an intraday high of $122.44
• New AI-powered glasses and partnerships with ZTE and Youku drive optimism
• Options chain shows heavy call buying at $120–$121 strike prices
• Leveraged ETFs BABX and KBAB rise 6.29% and 5.82%, respectively

Alibaba’s stock is surging on a wave of product innovation and strategic alliances. The company’s announcement of AI-powered glasses and a patent pool partnership with ZTE and Youku has ignited investor enthusiasm. With the stock trading near its 52-week high of $148.43, the rally reflects confidence in Alibaba’s AI-driven transformation and expanding ecosystem.

AI Glasses and Patent Pool Spark Optimism
Alibaba’s 3.13% intraday surge is directly tied to its announcement of AI-powered glasses and a new patent pool collaboration with ZTE and Youku. The glasses, powered by Alibaba’s Qwen AI model, position the company as a leader in consumer AI hardware. Meanwhile, the patent pool agreement with ZTE and Youku strengthens Alibaba’s intellectual property leverage in the tech sector. These moves signal a strategic pivot toward AI-driven consumer products and IP monetization, attracting both retail and institutional buyers.

Internet Retail Sector Mixed as Amazon Trails
The Internet Retail sector is mixed, with Alibaba outperforming peers like Amazon (AMZN), which rose just 0.22%. Amazon’s muted performance highlights Alibaba’s unique momentum from AI product launches. While Amazon focuses on logistics and cloud, Alibaba’s AI hardware and patent monetization strategy differentiate it. This divergence suggests Alibaba’s rally is driven by product innovation rather than broader sector trends.

Leveraged ETFs and Call Options Lead the Charge
• GraniteShares 2x Long BABA ETF (BABX): 6.29% gain, amplifying Alibaba’s 3.13% move
• KraneShares 2x Long BABA ETF (KBAB): 5.82% rise, tracking Alibaba’s bullish momentum
• 200-day MA: $110.196 (below current price), RSI: 45.9 (neutral), MACD: 1.167 (bearish divergence)
• Bollinger Bands: $115.39–$123.30 (current price near upper band)

Alibaba’s technicals suggest a short-term bullish setup. The stock is trading near its 52-week high and above key moving averages, with RSI indicating no overbought conditions. The Bollinger Bands show price is near the upper boundary, suggesting potential for a pullback or continuation. For aggressive bulls, the BABA20250822C120 and BABA20250822C121 call options offer high leverage and liquidity.

BABA20250822C120:
• Code: BABA20250822C120
• Type: Call
• Strike: $120
• Expiry: 2025-08-22
• IV: 40.31% (moderate)
• Leverage: 26.55%
• Delta: 0.616 (moderate sensitivity)
• Theta: -0.308 (high time decay)
• Gamma: 0.0446 (high sensitivity to price moves)
• Turnover: 270,440 (high liquidity)
• Payoff at 5% upside (ST = $128.48): $8.48 per contract
• Why it stands out: High leverage and liquidity make it ideal for a short-term bullish bet. The moderate delta ensures it benefits from price moves without excessive premium erosion.

BABA20250822C121:
• Code: BABA20250822C121
• Type: Call
• Strike: $121
• Expiry: 2025-08-22
• IV: 43.50% (moderate)
• Leverage: 28.40%
• Delta: 0.567 (moderate sensitivity)
• Theta: -0.312 (high time decay)
• Gamma: 0.0426 (high sensitivity)
• Turnover: 160,429 (high liquidity)
• Payoff at 5% upside (ST = $128.48): $7.48 per contract
• Why it stands out: Slightly out-of-the-money but offers a balance of leverage and liquidity. The high gamma ensures it gains value rapidly if Alibaba breaks above $121.

Actionable Insight: Aggressive bulls should prioritize BABA20250822C120 for its high leverage and liquidity. If Alibaba closes above $122.44 (intraday high), consider rolling into the BABA20250822C121 for extended exposure.

Backtest Alibaba Group Stock Performance
After an intraday surge of at least 3% for BABA, the win rate for a 3-day period is 46.75%, with an average return of 0.02%. However, the 10-day win rate is slightly lower at 46.57%, with a slightly negative return of -0.84% over that period. These results suggest that while short-term gains are possible, there is also a risk of moderate losses in the following days.

Alibaba’s AI Bet Payers Off – Act Now on Call Options
Alibaba’s rally is driven by a compelling mix of product innovation and strategic IP partnerships. The stock’s proximity to its 52-week high and strong options liquidity suggest the move could extend. Investors should monitor the $122.44 intraday high as a key resistance level. For those seeking leverage, the BABA20250822C120 call option offers the best risk-reward profile. Meanwhile, Amazon’s 0.22% gain underscores Alibaba’s outperformance in the sector. Act now: Buy BABA20250822C120 to capitalize on the AI-driven momentum before expiry on August 22.