Shares in Alibaba rose more than 15% on Monday morning, marking the company’s biggest single-day rally since early 2023.
Alibaba shares surged more than 15% on Monday after reporting strong growth in its artificial intelligence (AI) revenue. The company’s Hong Kong-listed shares climbed as high as 19% in the morning before paring back slightly.
The e-commerce giant achieved a triple-digit growth in second-quarter revenue from AI products, alongside a 26% jump in cloud division sales, which reached 33.4 billion yuan. The cloud business powers many of Alibaba’s AI services, with the latest figures exceeding analysts’ expectations.
As news broke of the Alibaba Group Holding Ltd (BABA) stock rally, China’s broader technology sector also saw gains. In Monday’s trading session, shares in Chinese multinationals Baidu and Tencent rose 6% and 3% respectively.
By contrast, the profits of rival firms JD.com and Meituan have taken a hit as the two companies remain locked in price wars relating to food delivery and online retail. Meituan bosses have even warned of major losses earlier this quarter, increasing pressure on the company’s investors.
Alibaba shares powered by strong AI growth
Alibaba’s results indicate that AI is key to its future stock performance, highlighting a shift away from its traditional business model. The Chinese firm now appears to be moving towards becoming a diversified technology business, rather than purely a retail entity.
Company bosses see artificial intelligence and cloud computing as more scalable and profitable than core e-commerce operations. This strategy has helped to contribute to Alibaba’s strong AI-related revenue and is a clear sign that AI momentum is building across China, despite fierce global competition.
It is also investing heavily in AI hardware, designing its own chip to reduce overall dependence on foreign semiconductor suppliers. This move comes as US restrictions tighten access to advanced processors needed to train and operate large AI models.
Some market experts believe in-house chip development could help Alibaba build cheaper, faster, and more secure AI systems tailored to Chinese market requirements. If successfully implemented, this could strengthen its competitive position in a fast-evolving sector that is central to China’s technological ambitions.
Alibaba plans further AI expansion
Eddie Wu, CEO of Alibaba, has been on record to describe artificial general intelligence as being the company’s “main goal”. He has also stressed the importance of building long-term leadership in advanced AI.
Recently, Alibaba updated its own open-source video-generating model, which is part of recent upgrades that range from agentic AI services to chatbots. In addition to this, it performed upgrades to its large language models supporting e-commerce, logistics, and global platforms.
In terms of its international operations, firms including Lazada and AliExpress are also being integrated with Alibaba’s expanding AI services. Analysts say this broad application proves the company’s capacity to scale its technology across multiple markets.
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