Alibaba Stock Rises 099% in Two Days Trading Volume Ranks 40th Amidst US Chip Design Export Regulations

On June 3, 2025, Alibaba (BABA) saw a 0.19% increase in its stock price, marking two consecutive days of gains with a total increase of 0.99% over the past two days. The trading volume for the day was 16.01 billion, placing it 40th in the overall market rankings.

Recent U.S. regulations on chip design exports are expected to impact several Chinese tech giants, including Alibaba. The new restrictions primarily target the use of American electronic design automation (EDA) tools and collaborations with Taiwanese chip manufacturer TSMC for producing advanced chips. While the specific repercussions for Alibaba remain uncertain, the company's involvement in designing its own chips could face challenges due to these new restrictions. The broader implications for Alibaba's technological advancements, particularly in semiconductor design, are yet to be fully understood.

In its latest earnings report, Alibaba reported a 10% year-over-year revenue growth, excluding Sun Art and Intime, and a 36% increase in adjusted EBITDA. Alibaba Cloud's revenue grew by 18% this quarter, driven by robust AI demand, with AI-related product revenue maintaining triple-digit growth for the seventh consecutive quarter. The company has successfully open-sourced over 200 models under the QN family, with more than 300 million downloads worldwide, enhancing its leadership in AI technology. Taobao and Tmall Group saw a 12% year-over-year increase in customer management revenue, driven by improved take rates and software service fees. Alibaba announced a total cash dividend of USD2 per ADS, reflecting a commitment to returning value to shareholders, alongside a USD11.9 billion share repurchase program.

However, there are also challenges. Free cash flow decreased by 76% to RMB3.7 billion, primarily due to increased cloud infrastructure expenditure. Despite revenue growth, Alibaba Cloud's adjusted EBITDA margin decreased quarter-over-quarter due to higher investments in technology and infrastructure. AIDC reported a loss of RMB3.6 billion, although it narrowed compared to the previous year, indicating ongoing challenges in achieving profitability. The company faces potential uncertainties in global trade regulations, which could impact its international e-commerce business. Alibaba is in an investment phase for its instant commerce business, which may pressure EBITDA in the short term due to aggressive user acquisition strategies.