Bilibili (BILI) Surges 6.66% on Profitability Turnaround and AI Momentum – Is This a Catalyst for Sustained Growth?

Summary
• Bilibili (BILI) rockets 6.66% to $28.68, breaking above its 52-week high of $32.50
• Q3 2025 net income confirmation and AI-driven ad revenue growth drive optimism
• Options chain shows 2026-01-16 call options at $29–$30 strike prices dominate trading volume

Bilibili’s explosive 6.66% intraday surge has thrust it into the spotlight, fueled by a rare confluence of profitability milestones and AI-driven monetization tools. With the stock trading at $28.68—its highest level since late 2024—the move reflects investor confidence in management’s disciplined cost-cutting and expanding ad business. The options market is already pricing in volatility, with call options at $29–$30 strikes seeing heavy turnover as traders bet on a potential breakout above key resistance levels.

Profitability Turnaround and AI-Driven Monetization Ignite BILI
Bilibili’s 6.66% surge stems from a combination of Q3 2025 net income confirmation, expanding gross margins, and AI-powered content tools that are reshaping its monetization strategy. The company’s shift from losses to profitability—supported by disciplined content spending and a share buyback program—has recalibrated investor expectations. Recent reports highlight AI-driven ad revenue growth as a key catalyst, with management emphasizing sustainable cash generation over user growth. This narrative aligns with Morgan Stanley’s recent note, which cited robust ad business performance despite lingering uncertainties in the gaming segment. The stock’s break above the 200-day moving average ($23.11) and 30-day SMA ($25.53) further validates the technical strength of the move.

Interactive Media Sector Mixed as BILI Outpaces Peers
While BILI surges, the Interactive Media and Services sector shows mixed momentum. Sector leader Netflix (NFLX) trades down 0.42% on the day, reflecting broader market skepticism toward streaming valuations. Bilibili’s outperformance underscores its unique positioning in China’s youth-driven digital ecosystem, where AI-powered ad tools and cost discipline are creating a distinct value proposition. Unlike peers focused on content production, BILI’s emphasis on monetization efficiency and AI infrastructure investment—planned for 2026—positions it to capitalize on China’s evolving digital advertising landscape.

Options and ETF Plays for BILI’s AI-Driven Bull Run
• 200-day MA: $23.11 (well below current price)
• RSI: 73.95 (overbought territory)
• MACD: 0.15 (bullish divergence from -0.22 signal line)
• Bollinger Bands: Price at $28.68 vs. upper band $27.14 (overbought extension)
• Gamma: 0.2095 (high sensitivity to price moves)
• Theta: -0.1005 (rapid time decay)

BILI’s technicals suggest a continuation of the bullish trend, with key resistance at $29.50 (52-week high) and support at $27.66 (intraday low). The RSI in overbought territory and MACD divergence hint at potential volatility, but the stock’s break above the 200-day MA and strong options volume indicate conviction. For leveraged exposure, consider BILI20260116C29 and BILI20260116C29.5, which balance leverage and liquidity.

Top Option 1: BILI20260116C29
• Strike: $29 | Expiry: 2026-01-16 | IV: 42.03% | Leverage: 44.22% | Delta: 0.465 | Theta: -0.1005 | Gamma: 0.2095 | Turnover: 7,114
• IV (42.03%): Moderate volatility pricing
• Leverage (44.22%): Amplifies gains if price rises
• Delta (0.465): Moderately sensitive to price moves
• Gamma (0.2095): High sensitivity to price acceleration
• Theta (-0.1005): Rapid time decay (favorable for short-term bets)
• Turnover (7,114): High liquidity for entry/exit
• Payoff at 5% upside ($29.91): $0.91 per contract
• Why it stands out: Combines moderate delta with high gamma for aggressive short-term gains, ideal for a breakout above $29.50.

Top Option 2: BILI20260116C29.5
• Strike: $29.5 | Expiry: 2026-01-16 | IV: 45.79% | Leverage: 55.27% | Delta: 0.377 | Theta: -0.0912 | Gamma: 0.1838 | Turnover: 22,900
• IV (45.79%): Slightly higher volatility pricing
• Leverage (55.27%): Strong amplification potential
• Delta (0.377): Balanced sensitivity to price moves
• Gamma (0.1838): High sensitivity to price acceleration
• Theta (-0.0912): Rapid time decay
• Turnover (22,900): Exceptional liquidity
• Payoff at 5% upside ($29.91): $0.41 per contract
• Why it stands out: High leverage and liquidity make it ideal for a controlled bet on a $30+ move, with gamma amplifying gains if the stock accelerates.

Trading Insight: Aggressive bulls should target a breakout above $29.50 with BILI20260116C29.5, while BILI20260116C29 offers a safer entry for a $30+ target. Both contracts benefit from the stock’s current overbought RSI and MACD divergence, but traders must monitor the 200-day MA ($23.11) as a critical support level.

Backtest Bilibili Stock Performance
The backtest of BILI's performance following a 7% intraday increase from 2022 to the present reveals a significant underperformance. The strategy yielded a return of -34.54%, lagging the benchmark by 80.95%. With a maximum drawdown of 0% and a Sharpe ratio of -0.12, the strategy showed no capital preservation and carried substantial risk.

BILI’s AI-Driven Bull Run Gains Momentum – Act Now on Key Levels
Bilibili’s 6.66% surge reflects a pivotal shift in its investment narrative, driven by profitability milestones and AI-powered monetization. While the stock’s overbought RSI and MACD divergence suggest potential volatility, the break above the 200-day MA and strong options volume indicate a high-probability continuation of the bullish trend. Investors should focus on $29.50 (52-week high) as the next critical resistance and $27.66 (intraday low) as a key support. With sector leader Netflix (NFLX) down 0.42%, BILI’s outperformance highlights its unique positioning in China’s digital ecosystem. For those seeking leverage, BILI20260116C29.5 offers a compelling setup for a $30+ move, but caution is warranted if the stock fails to hold above $27.66. Act now: Target $29.50 breakout with a stop below $27.66 to capitalize on this AI-driven momentum.