Alibaba's Hong Kong-listed shares surge 18.5% to March peak, driven by cloud computing unit growth and new AI chip launch.

Alibaba's Hong Kong-listed shares surged 18.5% on Monday, reaching their highest level since March, driven by strong quarterly performance of the company's cloud computing unit and the unveiling of a new AI chip. Despite a 2% YoY increase in revenue, net income surged 78% annually, and cloud computing revenue grew 26% annually, exceeding forecasts. The rally follows Alibaba's recent earnings report, which saw New York-listed shares close nearly 13% higher on Friday.

Alibaba Group's Hong Kong-listed shares surged 18.5% on Monday, reaching their highest level since March, driven by strong quarterly performance of the company's cloud computing unit and the unveiling of a new AI chip. Despite a 2% year-over-year (YoY) increase in revenue, net income surged 78% annually, and cloud computing revenue grew 26% YoY, exceeding forecasts [1].

The rally follows Alibaba's recent earnings report, which saw New York-listed shares close nearly 13% higher on Friday. The company reported a 2% YoY increase in revenue to RMB247.65 billion (US$34.57 billion), falling short of analyst expectations by 2% [1]. However, the company's Cloud Intelligence Group, driven by AI-related products, experienced a 26% YoY growth in revenue, reaching RMB33.4 billion (US$4.67 billion) [1]. Despite this, the company's overall net income increased by 76% YoY to RMB43.11 billion (US$6.13 billion) [1].

Alibaba's e-commerce segment, which includes platforms Taobao and Tmall, saw a 10% YoY growth in revenue to RMB19.6 billion (US$2.76 billion) [1]. However, the adjusted earnings in this segment fell by 21% YoY due to heavy investments in the instant commerce business [1]. The company's instant commerce division, which provides deliveries of certain products in China within an hour, generated revenue of over RMB14.8 billion (US$2 billion) [1], a 12% YoY increase.

Alibaba's strategic investments in AI and cloud computing are part of a $53 billion plan over the next three years, aiming to reduce dependency on U.S. technology and accelerate AI-driven growth [2]. The company's focus on AI and cloud infrastructure has positioned it to capitalize on long-term growth opportunities, despite the challenges posed by intense competition and macroeconomic headwinds.

In addition to its strong earnings report, Alibaba announced the development of a new AI chip to fill Nvidia's absence in China. The new chip is more versatile than Alibaba's previous chips and was developed after the company's long-standing relationship with Nvidia ended. Alibaba was one of Nvidia's biggest customers in China. The new chip is designed to handle a broader range of AI inference tasks compared to Alibaba's previous AI processors, making it more versatile [1]. This development comes at a time when Chinese tech companies, including Alibaba and ByteDance, have been pressured by Beijing to avoid purchasing Nvidia's H20 chip due to security concerns [1].

The company's stock price climbed 12.9% in the U.S. after initially dipping following the earnings report, indicating investor optimism about the company's strategic direction and the growth prospects of its cloud computing and AI segments [1].

References:
[1] https://www.cnbc.com/2025/08/29/alibaba-baba-june-quarter-2025-earnings-report.html
[2] https://www.ainvest.com/news/alibaba-q1-results-comeback-story-disappointing-earnings-revenue-misses-2508/