Alibaba shares up 15% in HK after reporting 10 AI revenue surge

Alibaba shares up 15% in HK after reporting 10 AI revenue surge

Alibaba Group Holding Limited's shares in Hong Kong have seen a significant increase of 15% following the company's latest quarterly report. The surge comes after Alibaba reported a substantial growth in its AI-related revenue, which has been a key focus for the company in recent quarters.

Alibaba's aggressive investment in AI infrastructure and product development has driven substantial revenue growth. According to the company's report, AI-related revenue grew by over 100% year-over-year for seven consecutive quarters in 2024-2025. Alibaba Cloud's revenue, in particular, accelerated to 18% growth in the fourth quarter of 2025 [1].

Despite the financial strains, such as a 76% drop in free cash flow due to capital expenditures and pricing wars in the cloud sector, Alibaba remains committed to its AI-driven ecosystem. The company's open-source Qwen models and ecosystem synergies offer cost advantages, particularly in domestic and emerging markets [2].

Geopolitical tensions have posed challenges for Alibaba's AI initiatives. U.S.-China regulatory friction stalled a high-profile collaboration with Apple, and China's tightening AI regulations have delayed international partnerships and added operational complexity [3].

However, Alibaba's strategic focus on AI integration across various sectors, including e-commerce, logistics, and financial services, creates synergies that competitors struggle to replicate. The company's P/E ratio of 14.04 reflects skepticism about profitability, but its triple-digit AI revenue growth and strategic partnerships, such as its $60 million investment in AI startups, suggest a path to long-term differentiation [3].

Investors are closely monitoring whether Alibaba's AI-driven transformation can offset near-term financial strains. The company's stock has a market cap of $322.22 billion and analysts currently have a consensus rating of "Moderate Buy" with a price target of $159.67 [4].



References:
[1] https://www.ainvest.com/news/alibaba-ai-investment-strategic-revenue-challenges-2508/
[2] https://www.alibabagroup.com/en-US/document-1830678592242057216
[3] https://www.businesswire.com/news/home/20250514856295/en/Alibaba-Group-Announces-March-Quarter-2025-and-Fiscal-Year-2025-Results
[4] https://www.marketbeat.com/instant-alerts/filing-10571-shares-in-alibaba-group-holding-limited-baba-bought-by-b-metzler-seel-sohn-co-ag-2025-08-30/