Alibaba Shares Hit Highest Level Since 2022

Shares of Alibaba Group Holding surged more than 18% following a significant boost in AI-related revenue, underscoring its ongoing progress against competitors in the wake of a post-DeepSeek surge in Chinese development.

The premier e-commerce platform in China reported a triple-digit percentage rise in revenue from AI-driven products, along with an unexpected 26% growth in sales from its cloud division, which is closely associated with the current artificial intelligence boom.

This development alleviated investor worries about intensified competition with Meituan and JD.com in the internet commerce arena. Alibaba’s stock experienced its largest intraday increase since November 2022 in Hong Kong, as investors disregarded a modest 2% revenue uptick and a surprising decline in operating income. The company’s upward trend also gave momentum to the broader AI market: Ernie’s developer Baidu Inc. rose by up to 5.8%, while Tencent Holdings also saw gains.

“Alibaba’s results highlight a division within Chinese tech: AI is driving scalable growth, whereas traditional consumer sectors are caught in destructive price wars,” observed Charu Chanana, chief investment strategist at Saxo Markets.

“The substantial increase in AI revenue and robust cloud sales indicate that Alibaba is repositioning itself for long-term significance in the tech landscape, beyond mere retail dominance,” she added.

Alibaba’s advancements in AI, where it is recognized as a leader in China’s artificial intelligence sector, have fostered positive sentiment despite concerns about fierce price competition with JD and Meituan in the extensive food delivery market.

This intense competition has inflicted greater damage than anticipated on several of China’s e-commerce giants: JD’s profits were halved during the quarter, while Meituan projected significant losses, leading to a $27 billion decline in shares of the three companies last week.

The AI aspect clarifies why Alibaba’s stock has markedly outperformed its more commerce-oriented rivals this year. Alibaba has also capitalized on the growth of an international segment featuring some of the globe’s most significant online shopping platforms, including Lazada and AliExpress.

“It embodies ‘China’s best AI enabler thesis,'” analysts at Morgan Stanley, including Gary Yu, indicated in a research note. This is particularly pertinent as losses in meal delivery and instant commerce peak this quarter, they remarked.

Investors are now keenly observing whether Alibaba will engage in margin-eroding competition while simultaneously declaring historic expenditures on AI service and computing development.

Commerce chief Jiang Fan announced on Friday that investments in quick commerce—food delivery and instant shopping—had already resulted in a 20% increase in users on its main Taobao platform. He noted that this emerging sector has advanced to a point where it can begin to achieve economies of scale in just four months.

Simultaneously, Alibaba is making considerable investments in AI, developing large language models to remain competitive in a critical technological race.

The company views AI as essential to its future, crucial for delivering cloud computing, enhancing its core business, and developing services that can compete with OpenAI and DeepSeek. CEO Eddie Wu asserted in February that the pursuit of artificial general intelligence (AGI) has become the company’s primary objective.

Recently, Alibaba upgraded its open-source video generating model as part of various enhancements spanning from agentic AI services to chatbots.

It remains to be seen whether Alibaba can leverage AI in an increasingly competitive environment. Companies like Baidu and Tencent are rapidly advancing and unveiling AI models, exerting pressure on Alibaba to achieve meaningful breakthroughs.

“Alibaba’s achievements echo a broader trend in Asia: while global tech is preoccupied with geopolitics and valuations, segments of Chinese tech are subtly reaccelerating—driven not by speculation but by genuine revenue growth in AI and cloud,” Chanana remarked. “This isn’t a widespread shift yet, but the divergence is clear.”

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