Alibaba Group (BABA) Rallies 7.16% on $390M Data Center Pact, Hits 2025 High

Alibaba Group (BABA) surged 2.44% on Monday, marking its third consecutive day of gains and a 7.16% rise over three trading sessions. The stock reached its highest level since September 2025, with an intraday jump of 3.15%, driven by strategic developments in its AI and cloud computing sectors.

The primary catalyst was a $390 million partnership with China Unicom to build a high-performance data center in Qinghai. Alibaba’s T-Head unit will supply 72% of the 23,000 AI chips for the facility, which will initially operate at 3,579 petaflops and scale to 20,000 petaflops. This collaboration cements Alibaba’s role in China’s domestic AI infrastructure, aligning with national efforts to reduce reliance on foreign semiconductors.

By integrating its AI chips into critical infrastructure projects, Alibaba strengthens its position in the $50 billion AI hardware market. The deal underscores the company’s transition from a cloud and software leader to a key player in AI chip development, enhancing its credibility in high-performance computing. Analysts highlight that Alibaba’s ability to secure large-scale contracts signals growing investor confidence in its long-term growth potential.

Broader policy trends also bolster Alibaba’s prospects. Chinese regulators have directed tech firms to phase out U.S. semiconductor imports, prioritizing domestic solutions. Alibaba’s AI initiatives align with this strategy, enabling it to reduce costs and compete with global rivals like Nvidia. The company’s self-developed chips are expected to drive margins in its cloud and digital economy segments, offering a scalable revenue stream through infrastructure contracts.

Investor optimism is further fueled by Alibaba’s strategic investments in AI and regulatory speculation. While Jack Ma’s potential increased involvement remains unconfirmed, market participants anticipate a more favorable operating environment for Chinese tech firms. This narrative, combined with strong fundamentals, has positioned Alibaba as a focal point for growth in AI-driven digital transformation.