Alibaba shares jump 19% on cloud unit acceleration, report of new AI chip
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From cnbc.com: Did you know Alibaba's shares skyrocketed over 19% in just one day? In the bustling tech landscape of China, Alibaba Group is making waves. Recently, their cloud computing unit reported impressive quarterly results, capturing investor attention. This surge marks the highest stock level since March, fueled by strong performance and ambitious AI chip developments. However, the journey isn't without challenges. While Alibaba's revenue for the June quarter reached 247.65 billion yuan, a modest 2% increase, it fell short of expectations. Yet, a remarkable 78% rise in net income and a 26% jump in cloud revenue reveal a silver lining. With AI-related products maintaining triple-digit growth for eight consecutive quarters, Alibaba is positioning itself alongside giants like Microsoft and Google. As the company dives into the competitive instant commerce sector, investors remain optimistic about its future. Will these strategic moves pay off? Learn more about this at cnbc.com.
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Read Original →Signage at the Alibaba Group Holding Ltd. headquarters in Hangzhou, China, on Thursday, Feb. 6, 2025. Qilai Shen | Bloomberg | Getty ImagesAlibaba's Hong Kong listed shares surged more than 19% on Monday as the Chinese tech giant's cloud computing unit drove strong quarterly results, while details emerged over its new AI chip development.It's the highest level for the stock since March. Investors have backed the company's improving performance in its key cloud unit and are content with the the tech giant's investment into new areas — particularly in the so-called "instant commerce," which has become incredibly competitive in China.The Hong Kong rally builds on the momentum of Alibaba's earnings report of Friday, when the company's New York-listed shares closed nearly 13% higher.Alibaba last week week posted revenue for the June quarter of 247.65 billion Chinese yuan ($34.73 billion), marking a 2% year-on-year rise that nevertheless missed analyst expectations. On the upside, a 78% annual surge in net income came in ahead of forecasts.The Chinese company's cloud computing unit was a bright spot with revenue picking up by an annual 26%, which was a faster growth rate than seen in the previous quarter. Alibaba's cloud growth has been accelerating over the last few quarter.watch nowLike some of its Chinese and U.S. tech rivals, Alibaba has been investing in AI infrastructure and developing its own models, as well as selling AI services for its cloud computing unit. Investors see the division as key to the company's efforts to monetize artificial intelligence, much like Microsoft or Google.AI-related product revenue "maintained triple-digit year-over-year growth for the eighth consecutive quarter," the company said Friday.That same day, CNBC reported that Alibaba is developing a new AI chip, which also supported the share price rally on Monday.Alibaba's core e-commerce business has meanwhile been showing signs of revival, while the company has jumped into China's cut-throat instant commerce space in China. This is a feature introduced this year on Taobao, one of Alibaba's main Chinese e-commerce apps, which provides deliveries of certain products in China within an hour.Investments in quick commerce weighed on Alibaba's adjusted earnings for its e-commerce business. Investors have given the company some leeway to invest for now.